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From The Times

September 21, 2007

Apple is at the core of a music rip-off, despite what Jobs says

Dan Sabbagh: Media analysis

Steve Jobs was in London this week promoting the wildly exciting but colossally overpriced iPhone – yours for £900 in the first year – with the phone alone costing £69 more than you would pay in the US. Apparently, the Apple boss believes that the costs of business are much higher in the UK (what do we do??), although this is not news.

A song on iTunes in Britain will set you back 79p, in Europe it is 99 cents, or 69p. In the US, it is 99 cents again, which translated into our money is 50p, although the difference with the States, but not Europe, is that sales tax is excluded and when that is factored in the price is more like 55p. And the pennies add up. Last year the value of music sold at retail in the UK was £1.75 billion, and digital ran at 6 per cent of the total. Let’s assume that Apple dominates digital sales and accounts for 4 per cent of the whole market: that represents roughly £43.9 million.

However, if Steve Jobs’s company had been charging American prices, it would have received only £30.6 million. It would be better still if the consumer had a choice, but Apple’s control over proprietary technology means that potentially cheaper rivals, such as HMV, cannot sell songs for download on to the market-leading Apple iPod. So the market is skewed.

Yet in a digital era, it should be easy to buy songs abroad to take advantage of the cheapest price. Apple, though, ensures that consumers are tied to their home country music store by insisting that purchases be made via a credit card registered to an address in that country – an obstacle that is not insurmountable, but at a quarter past midnight, when that dance track is one click away, it is too much like hard work to make a friend in the US buy it, burn it and send it over.

This is now under investigation by the European Commission. Unfortunately, such inquiries take years, appeals and all – this one dates back to 2005. While they rumble on, Apple can carry on as before, on an innocent until proven guilty basis. More to the point, the word on the boulevards of Brussels is that the Commission is having trouble making its case stick. To do so it has to prove that Apple is dominant, which it may be in the fast-changing world of digital music, but is not in overall music sales. And it is usually a principle of competition that emerging industries do not get thwacked with regulation.

So it is hard to force a price cut.

Apple, for its part, does not like to say much, but it does blame the record companies for forcing it into country-by-country stores. This is familiar stuff: Apple is a past master at shifting blame on to record companies for things it controls – Jobs accused the world’s labels of preventing him selling music without copy-protection, confusing nicely copy-protection with his insistence on proprietary standards that prevent the link between the iPod and other digital music stores. EMI agreed anyway, and it sells music that could be copied by pirates, but is still tied into Apple format standards.

Yet when record companies say they need Apple to run each store on a country-by-country basis, they have a point. Copyright is a national sport; some acts are signed to different labels around Europe. So Apple needs to strike territory-by-territory deals. The majors also say they need staggered release dates to coincide with promotional tours, which has some merit, although not if 50 Cent has a fit of pique after being outsold by Kanye West and does not turn up.

The future has to be greater synchronisation. Consumers should be able shop anywhere – and a digital store simply works out which country the person comes from (back to that credit card) and pays the appropriate parties accordingly. If, through some bloody-mindedness, an artist wants to charge Germans more, then customers should be alerted at the moment of purchase. As for staggered release dates, they should be allowed, but if fans want to get the US edition now, why not?

Exchange rates may move, but it would be better if the Commission could shame Apple into action. As things stand, it is Apple that should be explaining itself – to customers who should complain using the internet. It is, quite simply, a rip-off.

–– A state of permanent revolution seems to exist at the Telegraph Media Group, where journalists at the daily and Sunday titles leave at a bewildering rate, and editors come and go at will. Two weeks ago, Patience Wheatcroft, Editor of The Sunday Telegraph, left, after she had tried and failed to argue in favour of retaining a separate Sunday operation – although at the time the message was that no seven-day newspaper was planned.

Now it appears, in little more than than seven days, that that is not the case. Daily staff have been told to make themselves available for Saturdays, prompting a different conclusion. Change is necessary, but the best journalism is usually done against a fantasy backdrop of a newsroom that believes it is the most important place on earth. Perhaps the whirligig is how the Barclay family like it – remember the succession of editors when they owned The Scotsman. After all, roughly the same number of readers turn up daily, but the risk is that revolutions do damage, too.

Wages/sales taxes are lower in the US in comparison to the UK/Europe. However there is still a price hike/difference in the UK on most products. Businesses get away with it as the UK suffers from apathy when it comes to protesting - best way to protest is to open your mouth and close your wallet.

terence, London,

This is not true!

If HMV want to get their music on an ipod they could sell mp3 downloads. These can be imported into itunes and then on to the ipod.

The fact that they do not is the fault of Apple.

Too right it is more expensive to do business in the UK. Apple in the euro zone is all run out of luxembourg. The low company tax regime, hence lower prices.

This is being investigated by the EU and is a very old story. If you want to criticise Apple, try asking them about the cost of TV downloads which truly is a rip off!

This story just looks like poorly researched bit of Apple bashing.

Julian Sweet, Brussels,

I agree with the comments that everyone has a choice. You don't HAVE to buy Apple, but people do for many reasons. I am not too fussed about the price of the iTunes music store, but what makes my blood boil is the price of hardware, both Apple and photography gear in the UK compared to the states. MASSIVE differences, not just explained by VAT.

So, guess what? People have a choice where they buy these bits of hardware from ;-)

JM, Somewhere, UK

I'd think that everyone who knows the US Economy and the British one would know that it DOES cost more to do business in the UK and to buy or sell any products here. First of all intelligent shoppers and sellers must consider VAT which is 17% or so. In the US you rarely pay more than 10% tax and usually you pay nothing on internet sales.

Then you have to consider the exchange rate. The US Dollar is worth less and less every day. Currently over $2.00 for every Â£1.00. The fact is that when the 79p pricing was set the dollar was worth a lot more so the figures were much less skewed. I don't think Apple or any other company would change prices on a daily/weekly/monthly basis simply because the Dollar keeps dropping because then, in the future, when the dollar gets stronger they'd have to raise the prices back up which would anger customers again.

Apple's pricing is reasonable in a smaller, more expensive market and that's something we have to deal with for living in the UK.

Nat, Ayr, UK

There are a number of people on eBay who sell US iTunes gift cards and will even help you set up a US address to register your account. I find this helps when trying to download TV shows that aren't on in the UK for months after the US release. At least I'm paying my $1.99 for it and not illegally downloading it which I'd do if the service wasn't available.

Also about the iPhone. Compared with a Â£25 contract with a Â£7.50 data package the iPhone only works out costing Â£324 more than a phone that you would get for free.

Andrew, Redcar, England

As an iPhone, and iPod owner, articles like this one draw my attention because Apple is my primary source of digital media and entertainment because they so cleverly intertwine everything together.

You don't HAVE to purchase music from the iTunes store to get it on your iPod or iPhone for that matter. You download the music, save the file to a folder you can locate, and import the legally purchased tracks into your iTunes library.

Next time you connect and sync, it will be loaded on your iPod or iPhone. Regardless of where it was purchase or obtained from.

Do your research.

Rob, Ann Arbor, MI, United States

This article is one eyed and not accurate.
The iPhone features technologies and usability (read research and development) that no other mobile phone has, and the price is lower than many current phones (from companies that are going to "copy" the iPhone soon).
The price difference from USA to Europe and to UK is not that big. Also consider that you must add about 8 percent taxes to USA price. Also consider that distribution network in different countries can have different cost. And.. well... consider different monthly wage... do you want a "euro priced" iPhone? Try to pay for it, working in Portugal, Spain, Italy, ... Or just ask UK to switch to Euro ;-)
About the online music market... there will always be a "leader" in every market. If not Apple, maybe Banana or Mango. Good to have a Commission that verifies things, btw. Great that Apple is a company that adds quality and usability to everyday life products, not only adding features to the list, like most do.
Just my 2 euro-cents.

Rolando Spinelli, Roncobilaccio, Italy

As someone from the music biz, I have to say
that, if the author wants to call himself a 'media analyst', he should really get his facts right.
Just sounds to me like Apple bashing!

For a start, most of the money from Itunes sales, go record companies, so his calculations grossly exaggerate, how much more Apple makes, from 79p vs 50p price. Secondly, most likely, UK prices were set with consulation with the major record companies. Although, I agree, that prices for digital downloads, should be the same as in Europe, the reality is, that prices in UK are higher in general.

david f, Melbourne, Australia

Let's remember that US consumers have to pay state sales tax (around 7 to 8%) unless they are dealing by mail with a vendor with no outlets in that state. We have the welfare state that costs a fortune as well as the EU taking a slice of our VAT, which is why our sales tax is over twice as much.

That said, Apple and many others charge a lot more in the UK (downloads for example). Even more than mainland Europe. The problem is that our UK middle men are used to higher gross margins (to cover outrageous business rates, for example) and UK competition is often quite minimal.

Colin , Shrewsbury,

It's not just Apple, I have just cancelled my napster subscription due to the dollar/sterling difference, which is a shame as they were supposed to be the competitors. Incidently when I tried to phone Napster to complain I was cut off!

Answer- A British rival backed by our own music industry.

Steve, Bodmin, Cornwall

What a poorly researched attack piece on Apple: "a past master at shifting blame on to record companies for things it controls"?

Apple does not control the sale of digital music. Indeed consumers do not even "buy" music from Apple. By purchasing music from the iTunes store you are in reality only licensing that music from the music label.

It is the music and film industries that use license aggrements to restrict users' rights and freedoms not Apple.

Compare the sale of music on iTunes with the sale of DVDs. Apple had no involvement with the development of DVDs and yet DVDs are region specific - those purchased in the US won't work on European DVD players and vice-versa.

Tom, London,

I totally agree with Dan - Creative has a far superior product, but their marketing is not as good as Apple's.

Tony, Marlow, Bucks

This is not Apple's fault. Take a good look at what happened to CD-Wow if you want to know what would happen if Apple started selling songs at 55p each.

It is the record and movie collection agencies that really sting us in Britain, and they have far more power in policital circles than they ever should. It is the dark side of capitalism, and these organisations could almost be called a racket.

Apple sting us [in the UK compared to the US] by about 15% for the cost of their computers, but that's a totally seperate thing and is not at all unique to Apple. We pay more for most things, especially tech, compared to other G8 countries.

Adrian, Nottingham, UK

It's a rubbish phone, over-priced and is designed for the latest "man-bag" consumer society.

- You can't change the battery.
- You can't change the network
- The phone will eventually die before the 2 year contract is up as the battery won't last that long.
- You cannot connect to 3G and have to use the terminally slow 2.5G EGDE network.
- You are stuck with iTunes to synchronise your data.
- You are stuck with iTunes overpriced store for music purchases.
- Need I continue?

Frankly if Microsoft are getting fined for forcing people to use WMP, and not releasing their server core code, then Apple deserve to receive the same.

I see nothing but anti-competitive behaviour in Apple's tactics and even though I have a third generation iPod, I will certainly never purchase an iPhone, or another iPod until I can change the battery myself.

Nick, Reading, UK, UK

"The music labels insist on country-by-country sales precisely to allow price-fixing in the manner that makes songs cost more in the UK - adopt the Euro if you're so annoyed by this."

More to the point - Don't buy Apple (anything) and don't buy locked formats; market forces will prevail.

Brian P, Hemel Hempstead, England

what is this, AAC, DRM, WMA, this fomat, locked out by the BNG of the TNT by the ABC- gobble gobble - techno babble- RUBBISH!, if you like a song, if a particular musician evokes an emotional response go out and by the album- simple. the idea that a large mutinational corporation is ripping people off, comes as a surprise!!- to who? it used to be for the love of music.

duncan, dubai, UAE

If you're just another fashion conscious sheep, who only has the intelligence to buy Apple products then more fool you. Just don't come complaining when you realise you're getting ripped off!
There are plenty of alternatives...

Richard, Braintree, UK

As of today, take a look at the price of Microsoft Vista:

Amazon UK: Microsoft Vista Ultimate: Â£320.98

Amazon US: Microsoft Vista Ultimate: $329.99

ie the $ Â£ exchange rate of 2 to 1 doesn't come into play giving 100% extra markup for Britain.

Makes iTunes music look like GREAT VALUE!

Jonathan, Cardiff, UK

Reading these comments I am really suprised at how angry people are..... at defending Apple. It's a company, selling a product to get money off you. Why is everyone so worried about defending Apple and not the consumer??

Dominic, Abingdon,

Is Â£900 for the use of the iphone in the UK that much more "colossal" than rivals like the Nokia N95, which also come with upfront purchase price as well as high monthly tariffs?

As it's been pointed in the previous comments, the argument put forward in this piece has so many holes in it that I wonder if the writer even bothered to checkeven the basic facts.

Paul, London,

My God, this is a bit of a rant. Look the iTunes Store is not a money maker for Apple. It runs as a break-even operation that compliments the iPod nicely. No one has to use it (buy a CD, rip it, and then you can have even better audio files without DRM). Really, I consider it to be kind of lazy, but that said your music is at least coming from a legitimate online source. So, perhaps you should just buy you music at your local HMV. But guess what? It is more expensive too! Why would that be? Because the UK is an expensive market to do business in, for all the reasons that the other posters have outlined.

And other players are starting to support AAC (which I personally like over MP3), such as the Microsoft Zune, and a host of music phones (because the files are smaller than MP3's on average). They just don't support Apple's DRM, but I imagine that Apple's DRM-free EMI tracks would work on the competition.

Chris, London, Canada

"...Appleâ€™s control over proprietary technology means that potentially cheaper rivals, such as HMV, cannot sell songs for download on to the market-leading Apple iPod."

So are you just as upset that BMW transmissions don't work in Fords? Better go after BMW for their "proprietary" technology, eh?

B Renyar, Ottawa, Canada

It's strange how I never hear anyone complain about Adobe who price considerably more for the UK.

Adobe Photoshop CS3 in the US $649(Â£323) in the UK (ex. VAT)Â£485
Photoshop CS3 Extended $999(Â£497) in the UK (ex. VAT)Â£755
CS3 Master collection $2499(Â£1243) in the UK (ex. VAT)Â£1969

We have no choice but to pay this huge mark-up. Maybe it's our special relationship we have with the US?

Rob, Bury St. Edmunds, Suffolk

"As things stand, it is Apple that should be explaining itself â€“ to customers who should complain using the internet."

Looks like the author of this article failed to spot the much-publicised open letter that Steve Jobs wrote on the subject of Apple's music offerings and DRM.

Noone forces customers to buy Apple products, or music from the iTunes store. The iPod will play a variety of popular file formats, contrary to what has been suggested in this article. The only omission is WMA files which are not played because they are a proprietary Microsoft standard, locked down, in this case, by MS itself and not Apple.

Chris Beach, London, UK

Every time I go to London for a break I get ripped of from the first moment of my stay to the very last second. The only ones that did NOT rip me off were private citizens offering me services such as rides or general help, or those famous Pakistani shop owners: always good business. Big corporations, hotels, anything I had to deal with: big rip off and often the standard answer "I'm sorry, I don't know - I'm not responsible". At least its being done with a smile, which reminds me of home. It's good to hear that this is being addressed by the British consumers. 79p for a song in mp3 (bad quality that is) really is outrageously overpriced. The issue is to make portable devices accessible so that application can save files on iPods and iPhones which makes them available for competitors.

Rudi, Amsterdam, Netherlands

Try this:

Amazon UK: Microsoft Vista Ultimate: Â£320.98

Amazon US: Microsoft Vista Ultimate: $329.99

ie the $ Â£ exchange rate of 2 to 1 doesn't come into play giving 100% extra markup for Britain.

Makes iTunes music look like GREAT VALUE!

Jon T, Penarth, UK

What an astonishing article. What is it about Apple that attracts this stuff? Have you looked at other products such as:

Windows Vista Ultimate:

Amazon US: $329.99 ie Â£164.16

amazon UK: Â£320.98 ie $645.21

I think you are barking up the wrong tree with Apple's 20% price differential. Microsoft are hitting UK buyers with a 100% price difference!

Jon T, Penarth, UK

We read that Mr. Jobs is "... confusing nicely copy-protection with his insistence on proprietary standards that prevent the link between the iPod and other digital music stores."

This is blatantly untrue. The problem here is that so many other music stores are locked into the proprietary and heavily restricted Windows Media DRM scheme. A point by point comparison of typical Windows Media DRM restrictions with Apple's FairPlay DRM will enlighten the author as to exactly why using Windows Media is a bad idea. On top of that, the iPod (and virtually every other music player) can use the MP3 format, and some services offer just that.

To call into question Apple's "insistence on proprietary standards" is disigenuous at best. Take a look at the rest of the industry and find out how many of them aren't also using someone else's proprietary standard.

Scott Reynolds, Appleton, WI/USA

Jeremiah, I think that suggesting that VAT should be abolished is a little ambitious. However, VAT was set at 15 per cent until 1991, when Norman Lamont increased it to 17.5 per cent. This increase was intended to provide revenue for the Community Charge Reduction Scheme, to assist local authorities suffering from reduced revenues because of the huge numbers of people defaulting on the Poll Tax.

I think we can all assume that this situation is now resolved, so why not reduce VAT to 15% again? When compared to the US, even this figure is astonishingly high - to the point where we British might wonder when the Euro economies of scale are supposed to be kicking in!

We can all see the Government continually exhorting UK PLC to compete, but when it is suggested that the Government should be competing too, it seems to fall on deaf ears!

Mike Hart, London, UK

As an Brit who has moved to the US full time, I'm amazed at how inexpensive virtually everything is in the US compared with Britain. It's not just Apple products, or McDonalds, or fuel, or cars - it's clothes, books, all electronics, food, utility bills - everything. Sure we pay health insurance, but in the UK I paid taxes for NHS and I needed private health insurance so that I could get treatment when I wanted it, not when deigned by the NHS. Yes, take the pound price and consider it dollars. Don't single out out Apple. Consider cost in Britain and the beaurocracy of the EC for the cost and problems of digital music downloads. But I forgot - it's the done thing to knock the US for everything isn't it?

Martin O, Shalimar, Florida, USA

You know the best way to beat Steve Jobs and Apple from taking your money? Don't buy any music from the iTMS. Buy CDs and rip them to your player. Better still, don't buy an iPod. That'll drive those moneygrubbers silly. They'll fold in no time at all and reduce prices to your liking, not theirs.

Constable Odo, New York City, USA New York

What's the issue here Apple make products for people with too much money.

These products are more of a fashion item then a piece of machinery and they expect to be ripped off; Its all part of the Apple Image.

Dan, London, UK

PLEASE NOTE TIMES ONLINE STAFF: I am making a formal complaint directly to the CEO of Times Newspapers Ltd if you reject this legitimate comment for the 5th time of posting:

Try this:

Amazon UK: Microsoft Vista Ultimate: Â£320.98

Amazon US: Microsoft Vista Ultimate: $329.99

ie the $ Â£ exchange rate of 2 to 1 doesn't come into play giving 100% extra markup for Britain.

Makes iTunes music look like GREAT VALUE!

Jon T, Penarth, UK

Somebody was saying to buy cretive zen 60GB for Ã‚Â£150. I dont know where he was seeing this price, but amazon uk has it for Ã‚Â£385 and amazon us $320 new ipod clasic 80GB is Ã‚Â£158, much better deal. I gues creative is also ripping off british customers. Overall ipods have better construction and last longer, except they used to scrach much easier than other mp3 players. I think it was solved with this new generation all aluminium ipods.

toni, opava,

I'm getting tired of pundits who get the whole 'locked-in' thing completely backwards. There is not a single thing standing in the way of someone selling songs that either work with Apple's iTunes software, the iPod or the iPhone. Not a single thing. Then why doesn't anyone do it? Because it is Apple's competitors that want to lock people into their formats. Ask Apple's competitors why they don't make their files available in the open, industry standards that Apple supports: MP3, AIFF, WAV, MPEG-4, AAC or plain old CDs! There are even more supported formats if you have the appropriate QuickTime plugins.

Mike van Lammeren, Kitchener, Ontario, Canada

Why people complain about Apple pricing? I mean, this is a free market. Buy other companies' stuff. Period. Nobody is there with a rifle ordering you to buy Apple. People make choices (except in US where they think to make choices ;-) and therefore the world goes on (or so does it seems). Maybe this means Apple's stuff is worth the price. Nobody can say that is not true to sustain they have the most innovative pipeline available today. Think about buying a Gucci wallet or a Prada bag...

umberto, Dublin, Dublin

Try this

Amazon UK: Microsoft Vista Ultimate: Â£320.98

Amazon US: Microsoft Vista Ultimate: $329.99

The $ Â£ exchange rate of 2 to 1 doesn't come into play giving 100% extra markup for Britain.

Makes iTunes music look like GREAT VALUE!

Jonathan , Penarth, UK

Mr. Journalist, is it possible you are not aware that MOST THINGS in the UK costs about TWICE what they cost in the U.S? I travel to the UK regularly, and being an economics nerd I pay close attention to these things. Literally, your price tags typically show the same number as ours ... but yours are priced in Pounds. Both the iPhone and iTunes tracks are actually VERY good deals for you, relative to everything else.

Kevin, Dodge City, Kansas, USA

Hint: buy iTunes cards in the US and use them anywhere. The price difference is maddening for Apple products but everything's cheaper in the States. Try comparing the price for the exact same car ...

Richard Essex, London,

Dan, thanks for your great anti Apple rant. Have your fine investigative skills focussed on CD-Wow? Perhaps you might care to do so and then come back and tell us how Apple is ripping us off.

Carl, London,

So much time is wasted by downloading ... it is a lot easier, and far less expensive to plop the CD into the CD player ... Spending $500 for a phone that plays music is absolutely ridiculous. I recently looked at IPOD prices here in the USA ... outrageous! Several hundred dollars for a piece of plastic that has to be charged every few days, and where one has to pay to download music ... I will keep my CD player, which takes Double A batteries ... a lot cheaper, and more convenient ... and far easier to use.

Marlene, Alexandria, Virginia, USA

Come on! UK residents should be delighted at the chance to buy music in this futuristic manner. What has Britain contributed to the high-tech world in the past 10 years, besides whining?
- James Shelly, Los Angeles, California, USA

james shelley, Los Angeles, California, USA

All of these comments are quite interesting. Interestingly, it seems like the author is probably the most ill informed out of all of us! Ok, here is what I think - I think the price differences of an IPhone have been covered and justified. The problem clearly lies in Itunes, DRM and file formats - they are just too many to facilitate a happy, unified consumer who wants to pay for music and then play it on any device. If I pay for music, regardless of format - who should tell me where I play it? The truly uniformed digital format is mp3 - it will play on any device regardless of the manufacturer. The problems lie with obsessed major record labels (who were used to charging obscene prices for CD's) trying to protect their copyrights - crazy that CD's have no DRM tho! Maybe they fore-go DRM when they were charging Â£10-15?! This means I or anyone else can rip a CD of mp3's and file-share. I really don't see how DRM can work if all formats (incl. CD's) are not covered by it. Mp3 all the way

Paul K, London, UK

Whats new, apple has always overpriced ALL their products and not just the ifone. Its funny how people finally notice this.
Hopefully apple's brainwashing field will fall apart soon.

AlphaVirus, Houston, TX/USA

There's a really simple solution to getting ripped off by Apple - don't buy their products. I don't, and I manage to get through life. I can even listen to another brand of MP3 player and people still talk to me. Apparently, having an iPod is not mandatory to live.... who'd have thought?

Frank, Everett, WA, USA

What a ridiculous article. Have you ever considered the average wage of a British worker is twice that as their counterpart in the US (because of the value of the pound). You've missed some very basic economics my friend.

Me, Manchester,

Many of your letters seem only to confirm one thing: that Apple customers are true masters of self-delusion, why esle would they buy their overpriced, overhyped stuff. Methinks they do protest too loudly.

John Claro, Cleggan, Ireland

Colossally overpriced ? Colossally exaggerated is more like it. Not to mention misleading. Let's include the monthly payments for all phones bought on eighteen month contracts, which is becoming the norm in the UK. And then the difference is much less.

And the iPhone is a device which in typical Apple fashion has a better implementation of more or less every feature, when compared to its competitors.

Apple is a company, which in common with others, exists to make money for its shareholders or owners. To expect anything else is naive. But when they produce products which work better and look better than the competition, then it falls to each customer to decide whether the product is worth the expense.

In my judgment, their computers, mp3 players, and now their phone, are better value and better quality than their competitors, and so I buy them. No-one holds a gun to my head, and I'm not especially gullible.

johndc, blackpool,

I have an iPod and have _never_ bought anything from iTunes - too expensive and the quality is only good for disposable pop. The iPod can play mp3, so get your music in that format. I actually buy the few tunes I have from tesco, and convert from wma.

William McIlhagga, Ilkley,

If it weren't for Apple, the music industry as it flourishes today would be purely banal.

The iTunes music store trounces any b&m store this or last century. Invaluable recommendations for music, collections, profiles, related artist. influences and contemporary to the itunes degree are not available anywhere else in the electronic or organic world. Gone are the days of records shops with experts who knew everything - those instead have been replaced by discount stores where myspace addicted employees care more about updating their profile than aiding a customer in his or her hunt for music. Even waiting in line to pay is a chore at these places.

The iPod is a landmark, a pivotal moment in history. It ushered in more uses for audio than one could ever dream of. Podcasts e.g. are integral parts of many student and commuter lives. Without them, many of our youth and contemporaries would be uneducated and uninformed - like yourself.

Try one on a iPhone... you'll understand it all.

Salty P. Seagull, San Francisco, CA

I still cant quite understand the attraction of iTunes when a better bet would be buying the actual CD from cut price sellers online or if you're not too concerned about the legalities or otherwise, down load it for a pittance from one of Russias web sites. MP3 started it all off and is still the dominant free format for those not brain washed by Apples iPod fashion statement. I have a large collection of legitimately bought CD's that I have copied onto my computer hard disks in both lossless FLAC format in case I need to replace a damaged CD as well as MP3 format for my MP3 players. If I really wanted to, I'd also buy music tracks on line but not from Apple at their rip off prices. In essence I object to any media company whether music or video dictating to me how I use, store or copy for my own use any CD or DVD that was bought in a high street store for personal use.

Mike, Alicante, Spain

You suggested that companies like HMV cannot sell music on the proprietary system. That is incorrect. They can, it just needs to be DRM free. Apple isn't at fault with those companies lack of success, their unwillingness to push the DRM-free agenda is.

Matthias, Madison, WI

Whats new here exactly, has the writer ever been to the states. Everything is cheaper and that was before weakened dollar. I dont see how this is apple's fault. Apple is a business and as a former business student I can confirm that you charge your customers the maximum price they are willing to pay for it. Thats life, thats business. If you are not happy about apple's prices then dont buy their products its that simple.

Dan, Nottingham,

"overpriced iPhone â€“ yours for Â£900 in the first year" - Â£269 of which buys you the iPhone. Wow! So you're saying the iPhone is cheaper than my first iPod, but the mobile charges triple the cost. I know the mobile companies are a rip off, but I didn't realize it was this extreme. Thanks!

"EMI... tied into Apple format standards." Not true. The EMI tunes are DRM-free. If you are talking about Mpeg4 audio, it's the new international standard for everything, like HD-DVDs, 3G, etc... AAC audio is as open as it gets.

DRM is the big problem. No DRM, no problem putting any music on any music player. DRM comes courtesy of the 5 record companies that control most of the world's music, along with rootkits, non-standard CDs, ringtone ripoffs, payola, civil suits, and unpaid artist royalties. The music oligarchy can't keep up the DRM fantasy forever. The law of physics actually counts.

Nonetheless, we should shame Apple for doing business with the mobile and music rip-off corps. I hate Apple.

brad, london, UK

Not sure where your figure of Â£900 comes from - O2 appear to be offering them for Â£269, plus a minimum tariff of Â£35 per month, which comes to Â£689 for the first year...?

Cleo, London,

Simple solution: Buy the CD. Rip the tracks to your computer. Stick them on your iPod.

The best of both worlds. You legitimately own the music. You have a physical copy of the album. And you can play it on your Ipod, iRiver, phone, whatever.

As long as you don't go selling your CD's off after you've ripped the music it should all be fine and dandy.

Ian, London, London

As has already been mentioned, currency exchange rates change constantly - and frequently drastically - and those changes seldom have a direct or immediate impact on the cost of living within that country. That is why some economists talk about the McDonalds economic measure, which could be argued to be a better measurement of the buying power of a currency within its home country.

It is entirely understandable for companies to charge a premium based on their physical location when being in that location increases their costs. However, what makes iTunes different is that as an online provider, their costs of doing business are not impacted by the location of the end user, and so their discriminatory pricing bears greater resemblance to charging different customers a different price because of where they live - or any other distinction.

Dominic Graham de Montrose, London,

A few points the article has failed to point out:

1) Apple have said all along that they would like to have a single European store, the record companies that they license their content from will not let that happen.

2) The EU have a case running about this issue - however they have identified the cause as the record companies, Apple have been asked to attend the hearings because they are the largest retailer.

3) You've missed the Zune, Microsoft's own media player, this is a device that will only play media from, I believe, 2 legitimate download sites, and will not play Microsoft's own Plays for Sure format.

4) This article is here because Apple are a big famous company these days. If you really want to highlight pricing issues have a look at the software prices from Adobe. The tech site The Register ran a story a while back basically showing that they have simply swapped the $ for the Â£.

Now.. I hope Microsoft paid well for this article.

Neil Bishop, New Brighton, Merseyside

Hmmm. Nice and misleading. As others have said, the price of the iPhone in the US is a tax free price, as different states have different VAT rates. The equivalent tax free price in the UK is about Â£230 - so yes, it is more, but not Â£69 more. Not really comparing apples with apples (arf).

And the shocking Â£900 year 1 cost? Well, no, it's Â£900 for 18 months.

There's nothing to prevent you using other music stores with the iPod. I use emusic - it works. As Jeremiah said, you coudl have spent a couple of minutes on your research and got the right answer here.

Ah well, better luck next time.

Jimboab, Leeds,

Apple only makes pennies from the sale of songs on iTunes â€“ the vast majority goes to the record companies who, as has been pointed out elsewhere, insist on per-country pricing and DRM locking (funny that they are happy to sell DRM-free CDs though...) Apple's core business is selling hardware and that is true across its range. iTunes to Apple is the same as movies and music to Sony â€“ availability of software sells the hardware. Two billion downloaded songs speaks for itself.

hangonaminute..., Hong Kong, HONG KONG

Simple solution. Don't buy Apple and don't buy iPod, iPhone or anything else! There are better bits of technology on the market for reasonable prices. For example if you have a Nokia 3G smartphone or a Windows Mobile based phone you can download and play MP3's anyway, so er.. why would you need an iPod? besides that MP3 players are dirt cheap these days and good have sound quality too. If you want to help Steve Jobs get richer and pay a "fools ransom" in doing so, then that's your choice. I for one certainly won't. I don't own an Apple computer either! ;D

Chris, Milton Keynes, England

Interesting point. But how much of the problem lies with inconsistent EU laws, and how much with Apple, or the people controlling music prices, the recording labels?

David, Birmingham, UK

" Colossally overpriced " ? Colossally exaggerated, more like. Not to mention misleading.The writer is including the cost of an 18 month contract , which is becoming the norm for most pay monthly phone deals in the UK.

So most phones, none of which have the implementation of features which set Apple products apart from all their competitors, will be subject to five or six hundred pounds of monthly payments. Exactly the same as the iPhone.

The difference is that the iPhone is a stunning multipurpose device , and not just a fiddly mobile phone on which most features remain unused because they are so poorly implemented. It's not perfect, but nevertheless is in a different league to its competitors.

And therefore worth the premium, in the eyes of many.

johnc, lytham st annes,

Dan Sabbagh says "It would be better still if the consumer had a choice, but Appleâ€™s control over proprietary technology means that potentially cheaper rivals, such as HMV, cannot sell songs for download on to the market-leading Apple iPod. So the market is skewed."
True but - there is a simple technical solution which gets around all of this - quite legally. Simply download a cheap program (free for a couple of weeks trial) called "Dopisp" and you can synch an Apple iPod with Windows Media Player, thus allowing you to buy music anywhere. I've tried it and it's works very well. I don't think Steve Jobs likes to publicize this one too much!

Robin, London, UK

I believe that Apple whilst they do possess products that i woulod certainly want due to technological features and chic-ness ...It is trying to dig potential consumers eyes out with high prices any of it services or products. Apple would always have its faithful following surely this represent a small part of the market...I agreed with consumers not buying their products/services and complaining to the company...it is extortation to pay Â£900. for a telephone inspite of it digital or tecnological advances features...Surely their in lies an unhealthy business practice. I am considering buying an ulternative product.

NixonS, London, UK

And of that Â£69 extra that you quote the iPhone as costing, about Â£40 is VAT - which the US price doesn't include. There is a difference but not Â£69. Anyone can sell music for iPods, they just can't sell FairPlay DRm'ed songs. Apple didn't want to sign up to Microsoft's proprietary DRM scheme so they made their own and because of the requirements of the music companies they've kept it closed so they can ensure it is as secure as possible.

If you want to look at music prices look at the record companies. Digital music isn't the only format which is more expensive here.
If you want to look at file compatibility look at the record companies. They're the ones who want to restrict what devices (and how many) you can play stuff on.

Thomas Motts, Chorleywood,

Apple sucks. They're worse than Microsoft in every regard whilst trying to pretend they're the good days...

Jamie Brown, Maidstone, England

Buy a 60Gb Creative Zen MP3 player. Around Â£150 online, built in FM radio, more durable finish, rip CD's with free Windows Media Player and use as portable data storage and a USB host (plug your digital camera into the player via usb and store your photos) Superb product, and not a penny going to Apple who are happy to rip off the British consumer. When I looked at music players I decided that Apple 's poor reliability, poor quality materials used and differential pricing policy ruled out an iPod on principle- the principle that I'm not a mug and resent being treated like one. It's no go bleating on about shoddy goods or services- support the competition!

Dan, Oxford, England

As a resident of both the UK and the USA, and work for a US based international company, I can easily see the tactics involved in the case not only of Apple products, but on literally the whole range of products imported to this country. There is only one way to level the playing field: Hit the companies concerned in the pocket by not buying the products. There is such a temptation to take the convenience approach, as a consumer, but this is exactly what these companies are relying on. So do two things: Stop buying the products and complain to the companies, in writing, why you refuse to accept their greedy terms. As a previous writer explained, there are good reasons why products are slightly more expensive, but when the differential is huge, act as I have suggested. If enough of us react in this way and these companies start to feel the pinch, they will either cease trading in this country or adjust their prices. We complain about rip off Britain: Do something about it!

E. Evans, Braintree, Essex

Nick middlesborough. 80p equals 12 RMB in China which will buy you a decent Chinese meal. Most chinese use Mcdonalds as a special occasion treat, they don't eat MCD as a regular thing.
If you are so gastronomically challenged as to eat Muck Donalds you deserve to pay through the nose for it. You can't get much for 2 pounds in UK anyway.

billcarr, Turku, Finland

"but Appleâ€™s control over proprietary technology means that potentially cheaper rivals, such as HMV, cannot sell songs for download on to the market-leading Apple iPod."

Get your facts right. Anybody can sell an MP3 that will play on an iPod. What Ipods can't play is other providers' proprietary DRM locked tunes, such as WMA. Also when in comes to value for money. Do compare Apple's Fairplay rights with other offers. It allows you to comy the tune to more devices and burn more CDs than most other DRM locked formats. So the only better value in the UK is actually free MP3s, be they legal or not....

Mattthew, Farnham, UK

Music on the iTunes Music Store is encoded in AAC, which is a format Apple licenses from the MPEG... anyone can license it. iPods also play MP3-formatted music, which means that any store that sells music in either of these formats sells music that will play on iPods - iPods are not locked to iTunes. Presumably you're confusing the FairPlay DRM system which Apple uses (and claims to use only because of record labels) with the AAC format, which misinformed/lazy people often interpret as Apple Audio Coding when in fact it stands for Advanced Audio Coding and doesn't belong to Apple.

The music labels insist on country-by-country sales precisely to allow price-fixing in the manner that makes songs cost more in the UK - adopt the Euro if you're so annoyed by this.

While you're at it get VAT abolished, since that pushes up the cost of the iPhone - a fact you ignore. I think the approach that Apple and o2 are taking with the iPhone is silly, but only about as silly as your points, frankly.

Jeremiah M., London,

MacDonald's is at the core of a fast-food rip-off. In markets around the world, the supposedly family-friendly burger chain charges wildly different prices for its market-leading Big Mac. The Chinese pay less than 80p for a double-decker taste of America while us Brits get charged a rip-off two quid.

Economists reckon this has something to do with the "cost of doing business" and "Britain's over-valued currency". Granted, I studied performing arts at university but I reckon those boffins are talking a load of rubbish. No wonder Ronald MacDonald is laughing at us. Can someone call the EC?

Nick, Middlesbrough,

I recently looked at the price of the iPhone (device only) in the UK versus the iPhone in the US and after making adjustments for VAT found the differential (the cost of doing business in the UK) to be 14% of US selling price.

Compared with anything else I buy, I consider this to be a bargain.

We do have a much higher cost of business than the US. Just a few examples:-

Lower volume per market.

Currency risk (hedging costs)

Higher cost of advertising spots

Our higher incomes

Higher property rental rates and taxes

Much higher fuel and transportation costs.

Much higher Travel and Living costs.

Hugely higher costs of taking a business partner to lunch or dinner.

So, bully for Apple. Keep doing a great "Job".

bjmc, London N1, U.K.

Before Apple is accused of rip-off pricing tactics, let's take a look at pricing of most things in the UK and the US.

My wife's an ex-pat, and when we visit Britain (every year) we are amazed at how similar the prices are in numerical value (i.e., an audio CD here is 11.99 dollars and generally run about 11.99 pounds in Britain.) That's 24 USD to us.

This applies to most things... food, books, train tickets, automobile rentals, computer memory, and on and on... the numbers are similar and only the monetary units are different.

The weak dollar and super strong pound make things in the States seem half price to the America-travelling Briton, and, breathlessly, twice the price to UK visiting Americans.

Quite true. We see it every time we arrive in your green and pleasant land.

Converting USD to British Pounds then crying "rip-off", is really just constructing, then knocking down, a large straw man.

R. Whittington, Santa Barbara, CA

Anyone concerned about Apple being a rip-off have other choices from many other manufacturers of mobile phones and music players. Apple is not holding a gun to anyone's head to force them to use any Apple products.

Charles Smyth, Belfast, Northern Ireland.

"the Apple boss believes that the costs of business are much higher in the UK (what do we do??)"

VAT and red tape are the most obvious.

Its not like Apple is the only guilty party, a car has a rough mark up of 50% of the US price in the UK.
Now, unless all the car companies are secretly working together, which fails plausability when so many collapse.

Dominic, Manchester, UK