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Comment by Zenst | Hacker News Reader

Question is - if/when the lira rises 15% (#1), will Apple respond as timely to adjust prices cheaper? Mindful that companies are quick to point to a reason to increase prices yet when that same reason goes the other way, not so quick (if ever) to adjust down.

Is Black Friday sales a thing in Turkey? As can imagine many who would of banked to buy then, only to get hit with the polar opposite in this instance.

#1 - (maybe in a day with things settling out, dunno about specific reasons for the crash but mindful the whole Omicron dram and market magnification/snowball effect could be factor here as been so with some share prices past few days).

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> if/when the lira rises 15%

(Sure it is just an expression, but: here is a reminder that is something falls 15%, it recovers previous state through gaining ~17.5%; if it falls 20%, it needs to increase 25%; if it falls 50%, it then has to double...)

> will Apple respond as timely to adjust prices cheaper?

Well in one case you have arbitrage and are actively losing money, in the other case you are potentially losing sales due to the product being too expensive. So no I don't expect as Swift of an action.

> if/when the lira rises 15% (#1), will Apple respond as timely to adjust prices cheaper? Mindful that companies are quick to point to a reason to increase prices yet when that same reason goes the other way, not so quick (if ever) to adjust down.

I certainly don’t ask to have my wage lowered in months where inflation is negative. I’m not sure why anyone would ever negotiate against themselves. Apple will lower prices if their customers demonstrate they are not willing to buy at the offered price.

>"I certainly don’t ask to have my wage lowered in months where inflation is negative."

1) How often does that happen? 2) This is very hypocritical. People ask for things what benefit them. Why the fuck they should worry about corporations. If corps have problems it is up to them go and "ask".

1. Most recently in the US, half of 2015 and most of 2009.

2. That’s my point. Apple is looking out for Apple. I look out for me. If Apple can get a higher price, they’re going to stick with it if they can. Same as I would with a higher wage.

>"Most recently in the US, half of 2015 and most of 2009"

Basically negligible compared to general trend

I mean, it's not Apple's fault Turkey's currency is unstable. Why would it be their responsibility to take the exchange risk? I wouldn't be surprised if in response to future events like this they stopped accepting payments denominated in TRY altogether.

It's been a few years since I was in Turkey, but at the time, most stores took Euros. And street vendors even preferred it.

However, whether Apple is allowed to use Euros for the retail prices in store or not may be a legal matter. There are plenty of countries where it's illegal not to price and sell in the government's preferred currency.

I’ve lived in turkey for 3 years and I’ve only seen this with expensive imported bicycles.

There are capital controls, it would be illegal to sell in Euros to non-foreigners. There isn't anything stopping you from increasing the prices by indexing it to Euro though, you just have to announce it. Most consumer electronics markets use digital price tags for this reason. They update all prices in TL regularly (once a day etc.). Apple has this strange policy that it uses a fixed rate. They pick a high fx rate and stick with it until Lira depreciates to absurd amounts again.

A perfectly reasonable thing for Apple to do would be to buy foreign exchange options to hedge out the risk of currency fluctatuions, passing the cost on to consumers. So it'll cost a percent or two more in the price of a new Apple product, but that means Apple isn't exposed to risk of currency fluctuations. Having said that, Apple is probably a big enouhg company to just accept the risk itself and not pay for options to hedge that risk.

If apple do this, people will make use of the price difference and resell Turkish goods in the rest of the world for a profit.

Apple usually lags a bit in both directions. During the previous fluctuations Apple again had a period of extremely cheep prices, then raised the prices to match the dollar value and once the lira stabilised a bit they adjusted the prices again. In general, Apple gives quite a bit of buffer before adjusting the prices.

If Turkey is anything like eastern Europe, I’d be pretty confident that the people buying Apple stuff don’t have their salaries or bank accounts denominated in Lira.

For example in Ukraine anything that matters is priced in USD

Even wages?

In countries where you can’t trust the local currency, this is normal, yeah. You wouldn’t want your work suddenly devalued by 15%

Especially wages. At least for the industries where workers are in a position to demand.

A tech job that offer in local currency gets laughed out of the room around here.

Are people using btc because of the threat from Russia?

What? You’re gonna need to expand on that.

Who said anything about btc?!

Companies can’t be competitive, nor reach sales goals when prices are artificially high. Similarly they also lose sales to neighbouring countries - making price consistency important.

Despite it not fitting the evil megacorp narrative, good business requires prices to follow the currency changes - but not super tightly as that’s also harmful to business and consumers alike. Each company establishes their product margin and excess to that is not desirable - lost sales are invariably more costly than a small % gain in margin.

The other issue is that currencies usually drop quickly but recover slowly, it takes time to undo the instability in the currency and then attract investment to strengthen the currency. In the case of Turkey it’s due to their recent decisions to lower interest rates despite soaring inflation (the opposite of good fiscal policy). This will absolutely prevent any kind of bounce happening and psychological barriers to the currency have already been passed - meaning the currency (and with that the population) is likely to suffer further.

The Black Friday is definitely a thing in Turkey. It might surprise you that Black Friday is big even in Iran (Turkey’s neighbor).

I don't think so, and I don't remember that ever happening. Turkish Lira has always been devaluating. Black Friday is a thing here (with a different name but basically the same thing) but things were already at a skyrocketed price that only some items just went down to a "still expensive but sane" level.

That is a big ‘if’.

If the currency changes rapidly, it will have effects across the supply chain.

On sales during Black Friday / Black Weekend / Cyber Monday - this type of sales become common across multiple countries, including Turkey. But not nearly as famous.

> if/when the lira rises 15%

Turkey currently have negative forex, it won't happen.

A fiat currency that have lost all market confidence, it's not going anywhere but down.

During the Asian economic crash from 1998s, things like PC parts were priced in USD, and to get the local price, the shopkeeper would multiply the day's USD rate with the gadget's price, and show you the price on her calculator... but 2 decades later the currencies of the region have stabilized enough that this is no longer the case.

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