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Canadians paying “Apple Tax”?

Jennifer Kwan

If an Apple product is on your last-minute shopping list this year consider this: you, like many Americans, may be paying a so-called "Apple tax."

Here's the basis. The average U.S. household spent US$444 on Apple products in 2011, up 50 per cent from what they spent in 2010. In 2007, consumers doled out $150, according to Morgan Stanley analyst Katy Huberty. Comparatively, she notes "global spend" on the product was roughly $158 last year.

If Apple launches a TV, annual Apple spending by U.S. households could skyrocket to $888 by 2015, Huberty said in a note published earlier this year.

The "Apple Tax," coined by Chris Taylor from Reuters in New York, means Americans are paying unexpected taxes, or add-ons that lock them into the Apple system. iTunes downloads for music, movies and games, along with subscriptions and accessories come to mind.

"The analogy of an Apple tax might sound facetious, but think about it. Median U.S. household income was $50,054 in 2011, according to the Census Bureau. That means a sizable chunk of that is getting diverted to Apple headquarters in Cupertino," he wrote.

"Remember, this is not something that consumers are being forced to pay. They are dipping willingly into their own pockets, because they're essentially slaves to the devices."

If that argument holds, then Canadians may be paying into the Apple taxation system as well, given the popularity of the product north of 49.

Yvon Audette, a partner at KPMG who specializes in IT, said every member of his family, including his mother-in-law, owns between two and four Apple devices. From kindergartners to teenagers, the products are simply all the rage.

"If you're looking at something on your iPad and you have an Apple TV you can actually stream that to your big-screen TV. If you're a proponent of digital music, which everybody is these days, then you actually synchronize your digital music in your household," he said.

"If you know one thing or two about technology you can stream that directly to your stereo system directly from any device that you have that is Apple related."

While just a snapshot of product offerings, Apple smartphones continue to grab about 30 per cent of market share in Canada, according to ComScore, which tracks and analyzes the digital world.

Bryan Segal, a vice president at ComScore, declined to offer an outlook on Apple's penetration in the Canadian market, but said the data clearly points to the company's prominence in this country and Apple's ability to withstand a torrent of competition as more people use mobile devices.

"Though the share has remained the same the pie has almost doubled," he said. "They're continually keeping up with the market in terms of the ability to get phones into peoples' hands."