How would you feel if the price were lower than in the US? If Canadians got the same products for less?

Also, would it be cool to have lower prices for the same intangible product in the developing world?

There was also always a fine line on DVD region coding, which also tried to control markets over borders. However, it just became very common as DVD players got cheaper for people outside the USA to get Region 1 DVD players or multiregion players (which was possible due to bugs, or if you used deCSS)

http://beyondthebleedingedge.blogspot.com/2006/09/vonage-charges-you-42-more-if-youre.html

In Apple’s case, it appears that the store site is hosted on the same server as the US site as well. Moreover, when I made my purchase, what I bought was a license key. 9% extra margin for a license key because I happen to be Canadian?

1. Transfer pricing is usually referred to, in the accounting world, as the price charged by a parent to a country subsidiary for a product. When I ran Nicolet Canada in the late 1970’s/early 80’s Nicolet Canada could buy product at a 15% discount (to establish the transfer price) but then were expected to make a 20% gross margin on the final sales to end user customers (usually education, healthcare and industrial enterprises). The real issue here was to balance out a transfer price to a level where the Canadian and US Tax authorities were happy that tax avoidance or tax regime shifting was not an issue in establishing a transfer price. Competition usually took care of whether or not we could make the 20% gross margin.

2. What you describe above is what I would have called “country market pricing”. When I was in the PC Hardware (AST) and software (Quarterdeck) business we let market forces dictate country market price. All our product went through distributors who purchased directly from the parent company - with discounts based on US Suggested Retail pricing — and imported the product. The distributors, who took the foreign exchange risk, would resell to retailers who, in the end, established end user pricing (as required under competition law). Usually customers ended up getting product well below the suggested retail price, driven down by competitive forces within the sales channel. As a subsidiary we would independently bill our parent company our operating costs plus 10% — effectively for providing sales and marketing services; this kept the tax people happy on both sides of the border. (Of course in those days we never had an Internet that would allow e-commerce such as you described with your Apple experience.)