We’ve all heard the story of the falling Canadian dollar. Oil prices have fallen from $100/bbl to $45/bbl and the Canadian dollar has followed along directionally. The impact of the falling Canadian dollar is starting to ripple through electronic prices in Canada, mainly because most of the manufacturing is done abroad and imported in Canada, largely in US dollars.
Apple has increased pricing of its iPhone 6 models in March and iTunes prices went up earlier this year. The iPhone price increased in Canada by 12% while iTunes was 20%, pretty steep increases, but largely in line with the decline in the loonie.
But wait, did Apple forget to update it’s iPad Air 2 pricing in Canada? Currently, the Apple iPad Air 2 retails for C$549 in Canada, just as it did a few months ago. In the US, it retails for US$499. However, if you take the US retail price and apply today’s exchange rate, this implies a cost of C$634. But do the math, it’s only selling for C$549 in Canada, which means a $85 discount, essentially 13%.
We all know that Apple rarely discounts goods, its premium pricing follows its brand. What is most surprising is Apple just increased pricing of iTunes and the iPhone, so it’s very surprising that they did not follow through on the iPad Air 2. Was it a mistake or a calculated move? Nobody really knows, but if you are considering purchasing an iPad Air 2 in Canada, you might want to do it sooner rather than later before you see a similar price increase as just happened with the iPhone 6.
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Here’s why prices go up when the Canadian dollar goes down. Imagine you are a electronics retailer and you purchase your Apple products from the USA. You sell them in Canadian dollars but you need to pay your suppliers in US dollars. Now the US retail price has stayed constant, so you always owe them the same amount of US dollars, however, with the Canadian dollar declining it now takes you more Canadian dollars to purchase the same amount of US dollars. Hence, once your inventory runs out and you need to buy more product, it’s only natural that if your costs go up in Canadian dollar terms, your prices in Canadian dollars will go up as well to keep similar margins.
The bottom line is with the Canadian dollar in a recent freefall, and the fact that Apple has started adjusting Canadian prices in line with US prices and the exchange rate, they seem to have forgotten to adjust Apple iPad Air 2 prices – this is your chance to take advantage of it if you were thinking about buying an iPad – if you wait, you might just get caught in a price increase.
Photo credit: store.apple.com/us/buy-ipad/ipad-air-2
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