Apple, Microsoft and Adobe Required to Explain High Pricing in Australia

IJ Reilly said:

Actually, I did know that (we were thinking of a trip to Croatia this year so I did some research).

But the point is, you spend the currency you earn in your own country, not some other currency of some other random country. If you want to spend another country's currency, you need to exchange your currency for that one, and travel to that country. The ability to see what the people of other nations are spending on products causes many to have false ideas about what products should cost in their country. If your country has a relatively strong currency then products are going to look cheap in countries with weak currencies -- though the actual prices in both countries have not changed. Only the exchange rates make it look like they have.

Travel. Enjoy your strong currency. Travel abroad used to be a lot more fun for Americans, since our currency gave us great buying power. Americans are kind of trapped by our weak currency, which makes travel outside the U.S. to most places really expensive now. It's kind of strange to hear citizens of countries with strong currencies complain about it.

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Well, if you come to Croatia, I can give you some guide on what places to visit, even where to eat. Croatia is really one beautiful country, and I'm not just saying that coz I'm a Croat. The last untouched mediterian country.

And I'm a travel addict myself. Visited a lot of countries (US included, NY, CA, Virginia, and a lot more... ), but I have even bigger list of countries I want to visit when I get a chance to do so

But our currency isn't strong at all. And sooner or later the whole economic system will collapse. Excatly the same scenario like in Greece, Spain or Italy. But this time it will be even worse, coz we are really a small country with limited resources. Actually, only thing keeping us alive is tourism

nostresshere said:

All this MATH crap is just that, crap. Does not matter about taxes, percentages, cost, margin, profit.

A company can sell something for whatever price it wants. Nobody has to buy it. Nobody.

This is about the dumbest thing I ever read.

Companies like Apple that are being brought up this foolishness should just ask the government if they want them to LEAVE the country. Then see how much it will cost to buy these products.

Stupid.
Insane.

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How inciteful. Thanks.

92jlee said:

This forum is starting to annoy me now. I understand this is an `apple fan` forum but that doesn't mean everyone here have to tickle Steve's balls.
If this was about Microsoft, HTC, Google... Any other company then most of you would be outraged!
5% price difference is very unfair and you cannot use shipping as an excuse because they are all made in bloody China anyway!
To the people who think this is about tax, go back and read again!

Since they screwed up osx, stopped innovating with the iPhone and ditched the professionals I won't be buying their shiny over priced rubbish.

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Pow! Nicely stated.

nostresshere said:

All this MATH crap is just that, crap. Does not matter about taxes, percentages, cost, margin, profit.

A company can sell something for whatever price it wants. Nobody has to buy it. Nobody.

This is about the dumbest thing I ever read.

Companies like Apple that are being brought up this foolishness should just ask the government if they want them to LEAVE the country. Then see how much it will cost to buy these products.

Stupid.
Insane.

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Lazy, lazy, thoughtless post! No attempt made to understand why you just can't switch in a heartbeat. Just a glib 'buy something else, why don't you?'

When the likes of Microsoft and Adobe enjoy a near monopoly in their respective product fields to the extent that professionals are required to submit their work using said software, you try to switch to some alternative that cannot quite cope with the formatting, the macros, the colour reproduction in their attempts to ape the Microsoft and Adobe file formats.

Businesses and educational establishments are the hardest hit. Those have years of work and research invested in that software. They just can't 'stop' buying because the licence cost is high since the cost of switching is higher still. That is before you get into the unpleasant lobbying that goes on. Look what happened when the city of Munich ditched Microsoft for Linux and Openoffice.org.

Adobe and Microsoft understand this only too well. This is why they play games with pricing after lobbying for schools and government to use their software.

The real world is not some oversimplistic economics manual.

SPUY767 said:

Entitlement mentality. People feel as though they deserve things. "We deserve to get these items at the same price as they are sold in country x." "We however reserve the right to ignore the fact that our government places taxes on these products before they are sold to us."

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What you call 'entitlement' mentality (Yay! More cod-psychology courtesy of US TV pundits) other countries might regard as a disinclination to be treated as schmucks.

You, on the other hand, are perfectly entitled and welcome to bend over and take whatever is coming to you. Without complaint.

syd430 said:

if BMW suddenly decided to jack up their prices by 200%, another enterprising individual or company will fill the pent-up demand that BMW left behind.

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Thing is Apple has NOT jacked up the prices on it's hardware, do the math.

A top 27" iMac costs $1999US (Without state taxes), here it's $2199AU including the GST, but take off the 10% GST and it comes back to the same price as the US.

Its also debatable that the iMac's really cost more than the equivalent PC. I did some price checks and to spec out a BOX tower the same cost not much less than the iMac. And you're stuck with an ugly PC box most users don't need or want.

But again this is not about the Apple hardware (as much as the headline on this store wants us to believe) Its about software, online services and music purchased on iTunes. But then even then some things are actually cheaper here in Australia. Look at the latest OS X update. $19.99 in the US, $20.99AU here, take off the GST and it's cheaper here. A lot of this comes down to state and federal taxes and import duties not the price of products.

IMO Adobe has much more to answer for with a 50% premium on the US prices in most other countries. This is on software which even in box form costs next to nothing to ship, compared to a 27" iMac!

ItWasNotMe said:

Shenzhen - Sydney = 4587 Miles
Shenzhen - Los Angeles = 6888 Miles

So further you ship the cheaper it is

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except that the computer when it ships the consumer ships from inside the country (at least it does in the US and Canada).

First of all... This is about Apple pricing in Australia... If you live in another country, it really has nothing to do with you. Sure, you may have it worse off than Australians (sure sounds like it), and that's fine, but don't whinge about it here - write to your local governments and ask them to haul Apple over the coals too. Our government has chosen to investigate tech pricing in our country, due to such apparent disparity, and due to a lot of complaints.

Second, yes, this isn't as easy as it seems, due to the various factors involved such as taxes, freight, local enforced warranties, etc etc etc. (Though the local government stipulated warranties are not currently enforced...)

However, if after those factors are taken into account, it turns out that a company (in this case Apple, Microsoft, and Adobe, but they are just a sample group of the industry, and all other companies would thus be paying attention) is charging considerably higher prices in one territory over another, then why shouldn't they be brought to task over it? How is that fair?

Historically, Apple have appeared to price gouge Australians for decades. MacTalk, once Australia's largest online Apple users community, basically now bans discussions about how Apple rip off Australian buyers, because it is a topic that is so hotly and frequently debated. Over the years, there have been many items that, even after any logical calculations are made, are being way over priced locally, compared to the US market.

A better current example than the 3% iMac price quoted, is the Mac Pro. Gauging solely on exchange rates and approx taxes, we pay US$365-$600 more than the US - or about 15% - depending on the model. And we would then pay 20% more for AppleCare on the item than a US customer, if we decided to pay for that added expense.

(Admittedly, I've no idea how to comparatively compare AppleCare across markets... Though ultimately they are the same machines, so should have the same failure rates... Australia's 10% GST is applicable on repairs - unsure if the US markets have taxes on repairs...)

Apple Australia have (I am quite sure) gone on record to say that they need to price Apple products in Australia with a "buffer", to ride out any exchange rate fluctuations. This is understandable. I don't deny them that right. And I will readily admit that the "Apple Tax" as I see us non-US residents often refer to it as, has decreased in Australia over the past 5 or so years... Especially since the AU$ has reached parity with the US$... But there are still examples of noticeably higher prices on particular items over the US pricing, and as a customer, it is very frustrating.

Can I buy the item direct from the US, and have it shipped here cheaper than buying it locally? Yes, I can, but Apple Australia could refuse to repair such an item if it fails within its 1 year manufacture warranty.

Does Apple price their products higher in foreign markets? Yes

Is the cost of selling Apple products higher in foreign markets? Possibly

Should Apple be able to price their products however they want? Not in my opinion


Oh, and Aussies don't drink Fosters, we export it. Very few of us can successfully throw a boomerang. We don't eat shrimp - we eat prawns. Most of the kangaroos we see are road kill. Same for koalas.

c0ppo said:

Well, if you come to Croatia, I can give you some guide on what places to visit, even where to eat. Croatia is really one beautiful country, and I'm not just saying that coz I'm a Croat. The last untouched mediterian country.

And I'm a travel addict myself. Visited a lot of countries (US included, NY, CA, Virginia, and a lot more... ), but I have even bigger list of countries I want to visit when I get a chance to do so

But our currency isn't strong at all. And sooner or later the whole economic system will collapse. Excatly the same scenario like in Greece, Spain or Italy. But this time it will be even worse, coz we are really a small country with limited resources. Actually, only thing keeping us alive is tourism

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Croatia "the Mediterranean as it once was"

Looks petty but my wife doesn't want to go.

c0ppo said:

Well, if you come to Croatia, I can give you some guide on what places to visit, even where to eat. Croatia is really one beautiful country, and I'm not just saying that coz I'm a Croat. The last untouched mediterian country.

And I'm a travel addict myself. Visited a lot of countries (US included, NY, CA, Virginia, and a lot more... ), but I have even bigger list of countries I want to visit when I get a chance to do so

But our currency isn't strong at all. And sooner or later the whole economic system will collapse. Excatly the same scenario like in Greece, Spain or Italy. But this time it will be even worse, coz we are really a small country with limited resources. Actually, only thing keeping us alive is tourism

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Thanks we are still considering our options. Croatia has a lot of appeal, but it is expensive for us now. The Kuna might not be strong against other currencies, but it has appreciated by 20% vs. the USD over the last five years. Hope to see your country some time, even if it does not happen this year.

http://au.finance.yahoo.com/news/microsoft-apple-summonsed-explain-high-091353833.html
Finally a story that gets some of the facts right, when it comes to GST and such!

cosmichobo said:

Can I buy the item direct from the US, and have it shipped here cheaper than buying it locally? Yes, I can, but Apple Australia could refuse to repair such an item if it fails within its 1 year manufacture warranty.

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I wouldn't, maybe for an iPod if I was in the US but not much more.

Does Apple price their products higher in foreign markets? Yes

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Debatable, the top 27" iMac is about the same price when you take off the 10% GST and to the currency conversion. On most there might be a 5% difference at most.

Is the cost of selling Apple products higher in foreign markets? Possibly

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Yes it is, higher wages, rent and the like.

Should Apple be able to price their products however they want? Not in my opinion

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Free market they can charge as much as we are willing to pay, should they is another question.

Oh, and Aussies don't drink Fosters, we export it. Very few of us can successfully throw a boomerang. We don't eat shrimp - we eat prawns. Most of the kangaroos we see are road kill. Same for koalas.

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LOL not thrown a boomerang since grade school, not drunk Fosters ever. Love shrimps but only at xMas time and wish I could have kangaroo more often, it tastes great!

Lancer said:

...and wish I could have kangaroo more often, it tastes great!

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I wanna eat a Kangaroo. What do they taste like?

Another two factors I'm curious about... Is whether Apple Inc (US) dictate the price in foreign lands, or if it is the individual foreign entities that decide. And did the online Apple Store, or the physical Apple Stores change those decision making powers.

Renzatic said:

I wanna eat a Kangaroo. What do they taste like?

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It's very gamey... Quite strong tasting... Not for everyone... And causes a stink locally as some people think we shouldn't eat the animals on our Coat of Arms (so, also not happy that emu is on the menu). The indigenous Aussies have been eating roo for many thousands of years though... good source of iron.

Sayer said:

And really Apple's prices show a measly 3.8% price hike after insanely high Aus taxes are removed.

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Now try arguing that when the Australian dollar is 5% more valuable, and it still costs 10-30% more to purchase apps and content from the App store and iTunes stores - even though it's the same download from the same digital store.

Microsoft are worse. Windows 8 Pro = US$199, and A$399. Again, exact same software, exact same method of delivery

Apple products have ALWAYS been more expensive in Australia. As the new iPad and some other products of theirs have made it here though, the prices have been slightly better. But, for a 16GB Unlocked iPhone 5 it costs $799. More than the US? Hell yeah. $999 for the 64GB. Absolutely ridiculous. If Apple are wondering why Android has more of a foothold in Australia, all they have to look at is the price of iPhone. That is the one thing Fandroids hold over us in this country. An iPhone here is usually more expensive than a Mac is in the US.

Most people have to buy them on Plans with various carriers. As for the Macs...I was to buy a MacBook Air 13" in America when I was last there, decided against it for financial reasons, but ended up having to shell out nearly 500 dollars more for it back home. Which is ridiculous. They're made in China, and since China is in the Asia-Pacific region like Australia, why are these "shipping premiums" and whatnot so damn high?

The US is hardly one to complain about Australia taking a stand. Those people sue companies because they didn't lose weight on a Fat Free Doughnut, or sue because they fell on a wet surface even though signs were out saying "WET FLOOR", cut us some slack. We're sick of paying more when it's unjustified.

And as for the Kangaroo burger jibe from some idiot above, it's expensive here too. News flash, but Kangaroos are Australian only. So, they're pretty much endangered.

ItWasNotMe said:

From an ABC documentary on one of the factories Apple uses in China

"the entry-level salary of just £180 per month is so low that it would take more than two months salary to pay for the cheapest iPad.
Even if the lowest earners do the maximum available overtime of 80 hours per month, they still do not earn enough to pay tax."

Some joke.

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First, how much does the non entry-level worker make? How about the top earners? I'd go look it up but you did not give me your source. I can also assume that the article, for sensationalist reasons picked one of the lowest paid factories and not the avg factory? Also, the second half of your quote doesn't make sense, as it does not mention over what time period they aren't able to pay for the tax? Also, without tax information it's a useless statement.

Second, that's not Apple. Apple pays its employees and business partners fair market value, or better, from all evidence I've heard.

Third, I happen to be an educated engineer, and it would take me over two years salary to pay for the products I work on. So wtf does that have to do with anything? The ratio of my paycheck to product resale has nothing to do with whether it's being sold at a fair price, or whether I'm getting paid a fair price.

I'm all for everyone in the world being happier, and everyone in the world rolling in cash. However I'm not going to get there by making idiotic statements like "slave labour made goods". Consider this: If I hold up my iPhone and ask the world to raise their hand if they had anything to do with making my specific iPhone, more than half of the people that raise their hand are probably engineers, and may more than half are paid more than me. That's because the number of manufacturing hands that touched my iPhone are really quite small.

Number 41 said:

Next thing you know, you'll be telling me that Australians don't sit around tossing boomerangs and playing didgeridoo music all day either.

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No we ride kangaroos and throw shrimps on the barbie........


In all seriousness though, the price difference is not substantial enough to worry about. Apple has done a good job at pricing items in accordance with the currency exchange rate

Lancer said:

Thing is Apple has NOT jacked up the prices on it's hardware, do the math.

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I never said they did. You completely missed the point of my post. Did you even read it?

I said that Apple or Adobe or anyone else other than state run monoply entities can charge whatever they want in a free market .And no, adobe doesn't have any explaining to do either, I don't care what they charge. I know Photoshop is the industry standard, but if Australian customers were really that disappointed with the price, a competitor at 1/2 the price would of sprung up by now.

I live in both Australia and the US. Incomes are higher here in real terms. PPP is higher. Job security is higher. Unemployment has always been pretty much lower even pre GFC. All this means that the price elasticity of demand is generally lower here, and thus it makes perfect sense to charge more, even if that's 50% more like in the case of Adobe.

Renzatic said:

I wanna eat a Kangaroo. What do they taste like?

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Chicken... No just kidding, it's nice and lean a bit gamey but very nice when done right.

Koala is much better

syd430 said:

I know Photoshop is the industry standard, but if Australian customers were really that disappointed with the price, a competitor at 1/2 the price would of sprung up by now.

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There are some competitors for Photoshop like Pixelmator at like $16 which is 1% of the price of PS, which I'm testing. But the reality is like you said Photoshop is the standard and that's what people need to use.

I can't wait to see what Adobe has to say come March 22nd, if they can truly justify a 40-50% price hike for Australian customers?

It's interesting how this thread concentrated on the price difference between apple hardware in the US to Australia when it really should be looking at software. This is really what the enquiry is all about. The price differences between the us and aus apple stores have been talked about enough but consider this for Adobes Creative Suite Master 6 Collection

- Australia costs $4,334.
- US costs $2599.
- return flight to LA flying Virgin costs $1147.58

Therefore it's cheaper to fly to LA return and buy the software on come out with over $500 savings

I think the enquiry is justified

ItWasNotMe said:

Shenzhen - Sydney = 4587 Miles
Shenzhen - Los Angeles = 6888 Miles

So further you ship the cheaper it is

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It is when the boat to LA has a full shipping container (the size of a train car) with about 10000 iMac's in it for every pallet of 20 that is shipped as part of mixed cargo box to Australia.

Q1 2011 Apple sold 4 Million iMac's world wide, almost 1 million of them in the US, about 90K in the land down under. Volume is more crucial then distance.

jdmagoo1 said:

It's interesting how this thread concentrated on the price difference between apple hardware in the US to Australia when it really should be looking at software. This is really what the enquiry is all about. The price differences between the us and aus apple stores have been talked about enough but consider this for Adobes Creative Suite Master 6 Collection

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I totally agree but to be fare most of Apple's software is priced withing a few % of the US when taxes are taken into account.

Still iTunes needs to be explained but from what I've read it's not Apple but the record and movie companies that could be at fault here. Demanding higher royalties here in Australia than the US. Maybe the inquiry will bring the truth to light.

And we all know Adobe over charges customers outside the US. Microsoft too but to a lessor extent.

IMO customers with download options should be allowed to buy direct from the US and pay those prices in $US.

darkjeremiad said:

It is when the boat to LA has a full shipping container (the size of a train car) with about 10000 iMac's in it for every pallet of 20 that is shipped as part of mixed cargo box to Australia.

Q1 2011 Apple sold 4 Million iMac's world wide, almost 1 million of them in the US, about 90K in the land down under. Volume is more crucial then distance.

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Apple doesn't 'ship' products, they use air freight so smaller numbers per plane and some times I understand they go on commercial flights depending on destination and volume.

Stella said:

There have been various comments about "Free enterprise" - which really is a lame excuse, since there's a lot more than that going on.

I don't know if your from the USA, but if you were.... the USA has one of the most expensive drug prices compared to other industrial country. Upset about that? Maybe? Probably? Well, free enterprise, after all.....??

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FDA?

This is a classic tactic of the statist/marxist - greatly entrench the government in the process through major intervention, and then blame the resulting negative impacts of state intervention on the "free market". Only someone significantly naive or spreading propaganda would attempt to blame issues in the U.S. drug market on free enterprise while ignoring the existence of the FDA.

In a true free market, there can be no such thing as price gouging. Goods and services are exchanged voluntarily for the benefit of both parties in the transaction. We don't have free markets anymore - we have high government intervention everywhere, leading to syndicalism and enabling price gouging because of the government's intervention.

Kr00 said:

Exactly, and I live in the place. It's a distraction in the hope the people forget how bad a government it has been. All piss and wind (an old Aussie saying), and in the end nothing will eventuate from it. Don't judge Australians on the back of this story, we're embarrassed to even be associated with this bullcrap.

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While the last line is true enough, the premise is false. The current government has been dealing results for the majority of the nation while the rest of the world twirled the *******. The opposition even admitted they would have done the same thing during the GFC but that just gets swept under the carpet. The gov implements processes that are world recognised as best economic practices and the opposition proposes practices that were demonstrably useless decades if not centuries ago.

I don't like the current government, but the incoming government is a terror on two legs.

cosmichobo said:

It's very gamey... Quite strong tasting... Not for everyone... And causes a stink locally as some people think we shouldn't eat the animals on our Coat of Arms (so, also not happy that emu is on the menu). The indigenous Aussies have been eating roo for many thousands of years though... good source of iron.

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Honestly, I think emu would be better than kangaroo. It's a gigantic fat bird, so it probably gives you a meat that's like a combination of steak and chicken. Kangaroos probably have much tougher, stringier meat by comparison.

Plus one emu could feed a family of 30 easily.

Should focus on car prices not computer software

Hi,

The Australian government should be looking at the cost of cars instead.

BMW 328, USA price $35k, AUS price $65k

Now that is a big difference, albeit partly the governments choice through taxes.

Cheers Ed.