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

[MacRumors]

Apple is one of three high-profile companies being required to explain to an Australian government inquiry why its product pricing in Australia is significantly higher than in the United States, reports Kotaku Australia. The issue is not a new one for Australian officials, but legislators are stepping up their investigations into prices being paid by Australians.

The action comes after Apple, Microsoft and Adobe had all refused to send representatives to public hearings held by the IT Pricing Inquiry. The government has now issued summonses to all three companies, requiring them to attend and Parliament member Ed Husic warning that legal consequences will follow if they fail to comply.

These firms should have cooperated and been prepared to be more open and transparent about their pricing approaches. [...]

Adobe, Apple and Microsoft are just a few firms that have continually defied the public's call for answers and refused to appear before the IT Pricing Inquiry.

Apple's pricing does vary significantly by country, although comparisons often do not take into account taxes that are included in the base price in many countries but not in the United States. Different products also vary in their pricing comparisons across countries.

For example, the base 27-inch iMac is priced at $1799 in the United States, A$1999 (US$2054) in Australia and £1499 (US$2352) in the United Kingdom. But when subtracting included taxes from the international pricing, the iMac comes in at A$1817 (US$1867) in Australia and £1249 (US$1960) in the UK, for price premiums of 3.8% and 8.9% respectively.

For the 16 GB Wi-Fi iPad, the difference is even smaller once taxes have been accounted for, with the device priced at $499 in the United States, A$490 (US$503.38) in Australia and £332.50 (US$521.66) in the UK for price premiums of 0.9% in Australia and 4.5% in the UK.

iTunes Music Store pricing shows a much greater disparity for Australian customers, with tracks that sell for $1.29 in the United States being priced at $1.99 before tax in Australia.

Apple has traditionally priced its products somewhat higher internationally even when accounting for taxes, due in part to increased cost of business in many countries relative to the United States and as a buffer against fluctuating currencies. Customers and government officials in many of these countries feel, however, that pricing is still too high, particularly for digital content such as downloadable music and software that does not incur many of the overhead costs associated with physical goods.

The Australian Financial Review reports that Apple had testified in private on the matter, but had refused to do so at the public hearings. It cited IBRS analyst James Turner as commenting that this was part of Apple's long-established approach to secrecy:

It's a carry-over from the cult of personality that Steve Jobs built up around himself. People can call it arrogant, but that's only because Apple's way is different and they keep getting away with it. I also think that the refusal to engage will be what ultimately undermines Apple.

The public hearing is scheduled for March 22.

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

[Number 41]

Look, Australia --

Just because you've figured out how to sell a steak for $9 at Outback doesn't give you the right to go telling other people how to price things.

[WestonHarvey1]

Originally Posted by Number 41

Look, Australia --

Just because you've figured out how to sell a steak for $9 at Outback doesn't give you the right to go telling other people how to price things.

Outback isn't Australian. It's an "Australian themed" American restaurant chain.

[Number 41]

Originally Posted by WestonHarvey1

Outback isn't Australian. It's an "Australian themed" American restaurant chain.

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

[AidanOrlando]

Originally Posted by Number 41

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

We don't?? Wow I mustn't get out much then..

[Sydney 2000]

Originally Posted by Number 41

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

It really is the best way to relax after a hard day knocking Koalas off the harbour bridge, shovelling echidnas out of our driveways and boxing with kangaroos all day.

[macman312]

Originally Posted by Number 41

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

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

[Brian Y]

As for the UK - 10% more is MORE than justified. It's much more expensive to do business here in the UK than the US.

Also, they need to account for worst-case scenario currency fluctuations - having prices go up and down based on current exchange rates would be impractical.

[numbersyx]

Originally Posted by Brian Y

As for the UK - 10% more is MORE than justified. It's much more expensive to do business here in the UK than the US.

Also, they need to account for worst-case scenario currency fluctuations - having prices go up and down based on current exchange rates would be impractical.

Where do you get that analysis from? More expensive to do business where? In London over NYC? Is it more expensive to do business in Norwich than Boston? Makes no sense. Apple price it at the price they can sell it for and UK purchasers will buy at.

[HelveticaRoman]

Originally Posted by Brian Y

As for the UK - 10% more is MORE than justified. It's much more expensive to do business here in the UK than the US.

Also, they need to account for worst-case scenario currency fluctuations - having prices go up and down based on current exchange rates would be impractical.

Yeh, it costs so much more to download software from a website in the UK than the US.

[Brian Y]

Originally Posted by HelveticaRoman

Yeh, it costs so much more to download software from a website in the UK than the US.

Lol. I'm not talking about software downloads. I'm talking about running a retail store, and running a business in that country.

Nice attempt though.

[dpg69]

Originally Posted by Brian Y

As for the UK - 10% more is MORE than justified. It's much more expensive to do business here in the UK than the US.

Also, they need to account for worst-case scenario currency fluctuations - having prices go up and down based on current exchange rates would be impractical.

Worst case scenarios? The Aussie dollar has been stronger than the $US for two years......

[basesloaded190]

Originally Posted by WestonHarvey1

Outback isn't Australian. It's an "Australian themed" American restaurant chain.

I think you missed the joke/sarcasm

[mtneer]

This is ridiculous. Its not like we are talking about lifesaving drugs or anything essential. These are semi-luxury goods with plenty of alternatives that can perform the same functions.

[Stella]

The Australian government have every right to try and protect their consumers against price gouging.

Other countries should do the same IMO.

Unsure why above comments think otherwise?

Originally Posted by camnchar

That's how much it costs to ship products to the Edge of the Known Universe.

Even digital delivered content?

[aidler]

Base 27'' iMac comes with a price tag of 1,879.00 € in Germany. Thats 1,578.99 € before tax or 2,110.53 US$. A 17.3% premium and nobody is complaining.

[doawah]

Free enterprise is a bitch isn't it. Try buying an imac in Maui and see what you get. It's called the Price of gas. A friend of mine recently moved to Melbourne and their kids must have their american branded cereal in the morning (Parenting issue) and they go to a store that sell Lucky charms at $18 a box. If you are going to add import taxes, shipping costs onto your product then guess what, you're going to pay more.

If the Aussie government doesn't like it then make it attractive enough for a business to setup a manufacturing plant in your country so they can offer products at a cost equivalent to other countries.

Here, use this as an example on international cost. How much to buy an australian Kangaroo burger in the States?
http://www.marxfoods.com/products/Kangaroo

nuff said.

[KdParker]

Originally Posted by mtneer

This is ridiculous. Its not like we are talking about lifesaving drugs or anything essential. These are semi-luxury goods with plenty of alternatives that can perform the same functions.

Maybe not completly ridiculous, but I am not sure the government should be involved in setting prices for these types of goods.

That seems a bit strange.

[nightlong]

Originally Posted by mtneer

This is ridiculous. Its not like we are talking about lifesaving drugs or anything essential. These are semi-luxury goods with plenty of alternatives that can perform the same functions.

Might be a luxury item to you, but a Mac is a tool of trade for me. Are you saying with these "plenty of alternatives that can perform the same functions" that macs and pcs are identical and completely interchangeable?

It is your statement that is ridiculous.

[Tanda]

Originally Posted by mtneer

This is ridiculous. Its not like we are talking about lifesaving drugs or anything essential. These are semi-luxury goods with plenty of alternatives that can perform the same functions.

Do you consider Photoshop a luxury product with plenty of alternatives?

Photoshop CS6 Extended Pricing:
US: US$999
Europe: US$1,590
NZ: US$1,557
UK: US$1,479
BE: US$1,293

[SPUY767]

Originally Posted by mtneer

This is ridiculous. Its not like we are talking about lifesaving drugs or anything essential. These are semi-luxury goods with plenty of alternatives that can perform the same functions.

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."

[DeathChill]

Originally Posted by WestonHarvey1

Outback isn't Australian. It's an "Australian themed" American restaurant chain.

I'm pretty sure he was making a joke...

[TMar]

Originally Posted by WestonHarvey1

Outback isn't Australian. It's an "Australian themed" American restaurant chain.

I think the sarcasm was implied. Maybe you should look it up.

[WestonHarvey1]

Originally Posted by TMar

I think the sarcasm was implied. Maybe you should look it up.

Read it again. No cues it was sarcastic. Sarcasm isn't always easy to convey in textual form - maybe you should look that up.

[TMar]

Originally Posted by WestonHarvey1

Read it again. No cues it was sarcastic. Sarcasm isn't always easy to convey in textual form - maybe you should look that up.

Obviously there wasn't any cues you noticed. Sadly for you you're the only one missed it.