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Apple Hikes Japanese iPad, iPod Prices By 16%
The missing link to Japan's Abenomic recovery is and will be wage inflation: without it, soaring import costs which have more than offset any benefits from a modest rise in exports (and a still negative trade balance), will be for nothing, and if the wealth effect begins slowing or, heaven forbid, reversing, and the USDJPY slides back under 100 dragging the Nikkei down with it and all those hedge funds who scrambled into Japan with hopes of get rich quick dreams exit stage left, all bets are off.
The result, ironically, would be an even worse bout of deflation than the country had in the recent past as all Abenomics will have done is pulled demand forward driven by transitory stock market gains, while far stickier import energy costs hammer the consumer's discretionary cash flow. In the meantime, corporations aren't waiting, and in a need to protect their bottom lines are doing to selling prices what they have zero intention of doing to wages and costs: hiking them.
So following in the footsteps of many other luxury, and not so luxury, goods makers, Apple was the latest to announce overnight that it is hiking the prices of select iPad and iPod models by 16% and 14% respectively.
Apple Inc. (AAPL) raised the price of iPad tablet computers and iPod music players in Japan after a weaker yen that’s boosting importing costs prompted Toshiba Corp. and Fujitsu Ltd. to consider increasing prices.
Apple now sells the iPad Wi-Fi model with 16 gigabytes of memory for 49,800 yen ($493), compared with its previous price of 42,800 yen, according to Apple’s website. The iPod Shuffle music player costs from 4,800 yen, compared with the previous starting price of 4,200 yen.
“We made some pricing adjustments due to changes in foreign exchange rates,” Takashi Takabayashi, a spokesman for Apple in Japan, said by phone today. He declined to elaborate.
The yen weakened beyond 101 against the U.S. dollar earlier this month for the first time since April 2009 as Prime Minister Shinzo Abe spearheads measures to drive down the currency and end deflation. Fujitsu, a Tokyo-based maker of personal computers, said this month it plans to raise domestic prices. Toshiba said May 8 it may boost prices for televisions and PCs.
The nation’s consumer prices excluding fresh food fell 0.4 percent in April from a year earlier, the statistics bureau said today, compared with a 0.5 percent drop the prior month. The inflation rate hasn’t been above zero in the past year.
So to recap: the Japanese consumer is currently facing soaring energy and food costs, and ever higher prices of core "luxury" goods. The same consumer whose wages are flat at best. For the time being, the Nikkei225 has been a viable offset to plug the difference. However, the Nikkei225 is now approaching a bear market correction from its recent highs, which in turn will crush any consumption animal spirits Japanese households may have had, leading to even more risk asset selling.
In other words, there is no way this ends well unless Japan somehow passes a law making wage hikes mandatory. And with the country now literally all in on what is already a failing economic experiment, this may not be too far off. What happens after? One word - full banana republic status.
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Check the chart of Tecpo, instead.9501 jt - it's cracy. Even the biggest junk came to live again.
Funny central bank policies!
They make fiat money even out of burnt down nuclear reactors!
INFRATION
Not inflation according to BLS. Inflation according to BLS is the (fluctuation in price of earthworm manure over a period of 10 years when there is no demand for it)/120.
Fluctuations? Fluck you Yankees too!
INFRATION OR DEFRATION MAKE NO DIFFERENCE. JAPAN SOON THIRLD WORLD COUNTRY WITH NO EXPORTS, EXPENSIVE IMPORTS, TOO MANY OLD PEOPLE, NO RESOURCES AND NASTY NEIGHBOUR.
Yep Peter Pan! No natural resources will be the killer! Plus fukushima and they are fuked!
Looks like Cook can track i-flation. Even with all those pass-throughs!
Hmmm....Japan prints money and Ipad/ods go up in price.
Didn't see it coming.
Yep, the only thing that's free in Japan is sunshine, the air you breath and radiation....
bitchez
pretty soon, the evolution of "GOLD BITCHEZ" or "BTFD BITCHEZ", etc - now just "bitchez" - will be a rule #1 of FC post that is just "!" or even blank....
...and pretty much everyone here will know what it means.
In the next evolution the banksters are priests.
GOD'S NEW BANKER BRINGS MORE THAN A WING AND A PRAYER TO VATICAN...
Don't look at me....I'm not making this crap up!
actually it's the other way round, priests became the first bankers, in both ancient Babylon and Egypt. specifically, we humans have passed way more time lending from monasteries (be them Christian or Buddhist or whatever) than from the modern institution of banks
meanwhile, I note the usual horrid fascination with the Vatican. Yes, the sovereign state has a bank, with less than 120 employees. Yes, it belongs to the pope, since it's more a medieval House than a modern state. Yes, the new CEO of the Vatican Bank is Ernst Conrad Rudolf, Freiherr von Freyberg-Eisenberg-Allmendingen (short: Ernst von Freyberg). Yes, he is a Knight of the Sovereign Order of Malta. Yes, he has a castle, Schloss Allmendingen. Yes, the correct way to adress him (if you really like those things) is: "Herr Baron" or "Baron...". Yes, he helps pilgrims from Berlin to get to Lourdes. Note that the Order does not only have monks and priests, but this is a long story...
so what? should the pope select someone dropping out of the US Treasury's revolving door, instead?
Funny aside - in Babylon, banker, priestess, and prostitute was a single profession.
Soon to be the most powerful build in World of Warcraft. The new Shadow Banker Priest build, the longer you fight him the more money is siphoned out of your account until you are broke and even a percentage of future loots get sucked out of your account.... forever.
Actually, the way that they increase salaries in Japan is via the summer bonus. And that looks set to rise an average of over 7%.
http://www.fnn-news.com/news/headlines/articles/CONN00247087.html
Prices go up 16% and salaries go up 7%. What is this, the USA?
Comrade.... Did you take your Hopium today???? You seem to be awfully aware.
16 % for more Junk that nobody wants. Opens the market for knock-offs. They're doomed.
Precisely. One of Apple's greatest mistakes was, completely abandoning their professional customers, in favor of iCrap. I know, many will point out that iCrap earns more revenue. However, they abandoned these customers who carried their sorry asses through the 1990s (when they nearly went bankrupt).
Perfect example: the Mac Pro. I stopped buying Macs, when they killed the Xserve line. I saw the writing on the wall. Turns out, the Mac Pro hasn't really been updated (2012 speed bump doesn't count) in 3 years. It still uses USB2, for God's sake.
Professional customers may not spend as much, in aggregate, but when they buy, they buy big. A friend of mine works for a graphic design house, who would purchase 40-50 loaded ($6k plus) Mac Pros, at once, on a 2-year cycle. They've since switched to PCs running Windows 7, because Apple will not innovate further in this space.
what a load of CrApple
Are they pricing themselves out of global markets as well? Still need final demand...if the answer is "higher prices towards our major export exports" who's to say these prices can stick "in reverse"? I mean Sony up 125% in just a few months? That's pricing in a MASSIVE devaluation. Who buys anything from Sony anymore? Hewlett Packard, Microsoft...even all the Dell theatrics...surging on the news. Who's shorting this shit and getting killed here?
What they are trying to do in Japan is the equivalent of giving Viagra to a 95 year old man and hoping that he will dance Flamenco. You might see some interesting moves as a result of the Viagra but it won't be Flamenco.
What exactly did they think was going to happen??
Same thing here in USA. Massive commodity inflation showing up in food and fuel prices and no wage increases for 5 years. People gonna start getting pissy soon if this keeps up. I know I am. The propaganda squawkbox claiming that inflation is timid aint helping my demeanor either.
i read, "japanese central bank is working hard to make gold stackers rich". is this what this news is about?
The Private Sector there will get crushed while Gubming parasites do ok....since one group gets the raises ,,,,,the other not.
read 'when money dies how this will play out again.....not pretty.
Japan has got to try harder. It is only mission accomplished when USDJPY is at 200 because he who devalues the best...
El-Erian of PIMCO was asked about Japan and their sense is what Japan is doing won't get the intended result in the long term due to many of the things discussed here in comments and they will end up doing even more QE. Wage inflation is natural and sustained....not artificially ctreated by bonuses etc...and to be effective must outpace other inflation. So in this rudimentary exercise if wages, even if temporay, go up 7% and cost of goods go up 16%....that is not math that advantages the disposable income of the consumer. This all ties into Kyle Bass thesis that long term growth in Japan cannot be sustained at a level where it outpaces bad inflation and debt servicing becomes unmanageable. At some point, nobody will be buying Yen for safety and it will collapse as a currency. I haven't seen any evidence to the contrary to doubt what Bass and El-Erian say....even though El-Erian doesn't believe it will end in default. I guess technically Bass doesn't either....as he seems to think mass restructuring of debt/wealth plunge is the form it will take based on what i've read here and elsewhere.
Though it becomes more obvious by the day that the Japanese bug has finally found its windshield, I, too, wish them good luck in their experiment to overcome basic maths and the time continuum!
Forward, comrades Abe and Kuroda! Print moar and see what happens!
If you ignore logic then 0 = 1
That's how they think you see.
Fruck You, Shalom!
Abe has taken the worst traits of an economist, and one upped them. At least economists go to the trouble of constructing a model that they pretend is predictive, and if they are like Bernanke and they have also constructed models that tell them their models work, then they can fool some of the people all of the time (e.g., Jon Hilsenrath, Steve Liesman, Maxine Waters, Charles Schumer).
Abenomics is pure unadulterated winging it. Abe has no idea whatsoever of Japan's domestic industrial base, whether or not their fixed assets and technology are competitive, what the purchasing power of Japan's potential export customers is, and what is the mix of Japan's exports and imports so that he might be able to gauge the net effect of a yen depreciation. He just assumes that if the yen falls, consumers will want to spend before prices increase, and exporters will earn sufficient FX revenue so that increased taxes can cover debt service. He also assumes "unlimited" yen printing can influence consumer decisionmaking. Quite the gamble, and the quintessential example of the lazy politician.
Out of the blocks he looks like a journeyman golfer who shoots 64 in the first round of the Open Championship, but right now he's eleven over at the turn in Round Two and in danger of missing the cut. And the wind just started howling off the Firth of Forth.
The Bank Of Japan had better act quickly to remove tablet computers from its CPI. Heck, they could replace that product with typewriters or black & white TVs -- and then Presto, there is no inflation.
Phones, apps and games. Huxley's soma in the modern era.
I'm sure the deflation camp can explain this 16% increase away easily as a one time anomaly.
Japanese buying a non-Japanese tech brand? My, how times have changed... Or maybe Apple is just a faggy niche brand peddling Veblen goods to aspirational, and broke, debt- junkies, there as here, so raising the price increases the desirability - or maybe I'm being to kind to Apple's brand status.