iPad now cheaper in SA than Europe

The Apple iPad officially went on sale in South African stores today, and trade was described as ‚brisk‚ . A big attraction: previously unheard of local pricing. RJ van Spaandonk, executive director of the Core Group, importer and distributor of Apple products in South Africa, talks to ARTHUR GOLDSTUCK about the frenzy around the release, the simultaneous release in India, and the basis of the low prices.

The Apple iPad officially went on sale in South African stores this morning, more than six months after it was made available by a range of online retailers here. But there were two big differences: u heard of local pricing, coming in at well below the equivalent in Europe and the United Kingdom: and the official approval of Apple.

The iPad can be purchased off the shelf at 10 iStores around the country, selected Dion Wired and Incredible Connection outlets, and the DigiCape and Project 3 stores in Cape Town. All units are supplied through the Core Group, the sole approved importer and distributor of Apple products ‚ aside from the iPhone ‚ in South Africa. Core is known as a value added distributor, and operates independently from Apple, but has the sole right to import iPads directly from Apple.

Among the outlets it supplies, DigiCape and Project 3 in Cape Town, are referred to as Apple Premium Resellers, the highest designation of Apple-approved resellers, which means they are independently-owned, Apple-only retail environments. They have to have the same look and feel, even the same furniture, as Apple-only outlets. More important, though, they have to have the same level of training and support.

Next in the hierarchy comes Apple Authorised Resellers, and these include DionWired and Incredible Connection ‚ but not all outlets will have the iPad.

The interest, throughout the country, has been at a peak since the announcement of today’s release was made last night. Previous availability from unofficial importers, referred to as the grey market, appears not to have dampened demand.

‚There has been an incredible response,‚ says RJ van Spaandonk, executive director of the Core Group. ‚Most people are extremely excited about it being available. It turns out that a lot of people understand the dangers of the grey market and held off until the product was officially available. The loudest response is that people can’t believe the pricing.‚

(see pricing in yesterday’s Gadget story: Apple iPad hits SA)

The most remarkable aspect of the official pricing is that it is lower than the equivalent in the United Kingdom and Europe. An entry-level iPad is selling for 439 pounds in the UK, at current exchange rates 12% more expensive than in South Africa, and for 499 Euros in Europe, or 10% more expsnive than in South Africa.

‚Waiting it out until the product is official really means getting the best support at the greatest price,‚ says Van Spaandonk.

How could Core release the devices at such low cost? General speculation has pointed to the imminent arrival of a new version of the iPad in the USA, and the devices being dumped on markets like South Africa. The facts don’t bear this out, says Van Spaandonk.

‚We get a price from Apple and, as you can imagine, it’s a very favourable environment, with the rand strong and no import duty on the product. Then you apply logistic costs: the beauty of the iPad is that it has a very high value to weight and size ratio, which means the cost of transport is a very small proportion of the end-user price. There’s nothing untoward about that.

‚The release of a new iPad is also not a factor. It is simply not true. There is no indication that a new product is to be launched sometime soon. This is current product. Apple is also launching the iPad in India today, so we are just part of a scheduled global roll-out wave.

‚It is also not a price stunt or market entry promotion. This price point is what we intend maintaining into future, if the exchange rate stays the same. So you are paying effectively below R5000 for a tablet. Compare it to the Samsung Galaxy, and suddenly it is a very attractive product.‚

Van Spaandonk would not reveal how many iPads had been supplied by Apple initially, but insisted that ‚we will have sufficient supply. Some of the thinking behind the scheduled launches worldwide is that Apple wants to make sure there is sufficient stock on an ongoing basis, and support structures in the countries where it is released. I think we have enough stock to satisfy the needs of South African consumers, but at the same time we don’t want them to wait‚ .

– Follow Arthur on Twitter on @art2gee