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

[IJ Reilly]

This is also part of the problem. Apple adjusts prices in markets when the currency exchange rate has maintained a level for a certain period of time. They don't change it constantly. The Aussie dollar has been getting stronger and stronger against the $US, and Apple has adjusted over time, but they don't do it daily, weekly or even monthly.

If they were to lower prices only to have the Aussie dollar weaken significantly, all of a sudden they would be losing margin and be forced to raise prices, something everyone hates.

True up to a point. Exchange rates are not the first determinant of pricing, except maybe for commodity items that do have world pricing. Local markets are the primary factor, i.e. what stuff sells for in that market. Manufacturers based in countries with weak currencies are going to have a pricing advantage selling into countries with strong currencies, but they are going to use that advantage only sparingly to maintain or gain some market share. Their primary goal is maximizing profits, and a weak currency is an excellent opportunity to do that. This puts a lot of pressure on domestic manufacturers coping with strong currencies. Their margins can get squeezed till they squeak, and they tend to complain to their governments. The value of the USD vs. the AUD has dropped by more than 50% over the past 12 years, so we can see why they are griping to their government, and why the pols respond with this showboating exercise. It's really all quite meaningless in the final analysis.

 

[danpass]

It's an election year in Australia, and the current government is on the nose, so it has to look like it cares when it actually doesn't, and take a stick to big business in this type of way. It is an incredibly wasteful government, racking up a $300 billion dollar deficit in just 5 years. As reported, once you take taxes out, the difference is a piddling 3%. iTunes music is another thing, but the Australian music industry bartered for a higher slice of the pie, making songs far more expensive than in the US, but this has never really been explained.

We've had a fuel inquiry that came to nothing, and an inquiry into grocery prices, that led to nothing. Again, a stupid government pretending to do something, so take it as a diversion in an election year, and this government will be thrown out on its ear later this year.

So it IS an election year.

----------

....... A lot of it is actually taxes.

and import duties ARE a major factor ..... hmmmmm

 

[krye]

Shhhhh!! Did you hear that? No? Sorry, must be me. I could have sworn I heard a baby crying.

 

[IJ Reilly]

I think Apple sets the price of iMac in China and the USA. It has nothing to do with Chinese government actively discourages consumption. I would say Chinese government encourage consumption so that they don't need to depend on US market in the future.

Indeed, the current Apple customers in China are doing much better than average US customers financially. Apple brand is kind of Gucci and LV to those rich Chinese customers.

The Chinese government has actively discouraged consumption in favor of production.

http://articles.washingtonpost.com/...chinese-consumers-china-market-research-group

This may have begun to change, but only slightly and slowly.

 

[tech4all]

Not really, the comments would be very different if it was just microsoft being referenced...

The precious has been questioned! And the AppleGuard comes out to defend the Big Apple.

 

[camnchar]

They're built in China. Get a map. Connect the dots.

All right, but it takes a lot of pencil lead to get to the Edge of the Known Universe.

 

[Kr00]

So before taxes, the iMac costs $18 more in AU than what it does in the US. I think the people of AU need to tell their government to quit wasting taxpayers money chasing illusions.

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.

 

[apolloa]

All right, but it takes a lot of pencil lead to get to the Edge of the Known Universe.

But their is NO edge, space is an ever constantly expanding space, it is infinite.

 

[AnonMac50]

I'm curious about pricing in the Middle East, and Kuwait specifically. In some cases it is similar to UK pricing, and others it is slightly cheaper. Only issue is, we don't have ANY tax on Kuwait.

 

[crepuscular]

lol the british wall plug is indeed redic in size. the first time i saw it i was like dafug?

Have you seen the redic (sic) power supplies in the US?
They usually only deliver 110v (assuming electricity is flowing in the first place), and wimp out if you try to connect more than a vacuum cleaner to them. Kettles take forever to boil. Ironically the cables often get as warm as the kettles.

 

[Flaxxx]

Pffff.... this is nothing.

Have you guys checked the prices in BRAZIL?

Thaaaat's an insane country. Prices have come down a lot but they're still absurd. I remember when any apple products were at least 3 times the price they cost in the US.

 

[apple-win]

The Chinese government has actively discouraged consumption in favor of production.

http://articles.washingtonpost.com/...chinese-consumers-china-market-research-group

This may have begun to change, but only slightly and slowly.

But in the articles, it says

"On Thursday, China made its latest move to combat the slowdown, cutting key interest rates — the second rate cut in a month."

Encourage credit card use? It's a bad habbit.

 

[diazj3]

If Australia doesn't like it, maybe Australia should develop it's own home-grown talent and compete.

Let's imagine an Australia without any product from these 3 companies...

Oh, no! don't let anybody question abusive, arbitrary pricing or similar business practices, no matter what. And how dare they do it in public?...

Just imagine: what if Atlas shrugged?!?!?

Seriously, you guys have read one too many Ayn Rand novels.

Cheers!

 

[Kr00]

Let me add some context here. We have a government on the nose, ministers being charged by police for fraud, and a police investigation into our Prime Minister (Julia Gillard) for defrauding a union of funds in her previous life as a union lawyer. Make sense now? Google Julia Gillard AWU scandal, and you'll see what I'm talking about. Cheers.

 

[Mikey7c8]

Simple Answer: Because they can.

Exactly..

A few people have asked why the government is interested in this has higher prices means more tax - in short, it's because australians have been buying the gear in the states instead and using shipping companies to get their products cheaper than they can get them at home.

As a result the government effectively gets no tax on these items, and it's become enough of a problem for it to be an issue, especially with the high purchasing power australian wages maintain.

You might claim that this is more a customs enforcement issue, though it's clearly something that wouldn't have to be dealt with should companies provide fair prices in the first place.

Will be interesting to see what comes out of it

 

[schmidm77]

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

Please define what you think "price gouging" means?

 

[PatrickCocoa]

Free Oxygen!

Of course. And they should give you a pony as well.

You misspelled unicorn.

 

[HelveticaRoman]

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.

 

[OLDCODGER]

Because Australia isn't socialist, people there have more money to spare.

What?!!

It's been socialist since Whitlam slithered in!

 

[JayLenochiniMac]

Normally I'd make a remark regarding nanny state, but all my posts seem to get deleted so I won't bother.

 

[PatrickCocoa]

Note to the sarcasm impared: do not read this post

You guys have read one too many Ian Rand novels.

Cheers!

The James Bond guy?

 

[camnchar]

But their is NO edge, space is an ever constantly expanding space, it is infinite.

BRB buying more pencils

 

[Lancer]

While I'm all for a better price I would hardly call 3.8% a significant difference in the price, it's a lot better than it used to be. I think one major difference is our prices includes GST where as the US that is added later depending on the state taxes. That said the iTunes price is a bit higher 30% difference which is partly explained with local record deals but still.

Adobe is much worse. In the US the full price of Photoshop CS6 Extended is $999US, while here it's $1519AU, over a 50% rise in price for software that doesn't need an expensive box to ship in. Even with our local 10% GST it should be no more than $1100!

 

[IJ Reilly]

But in the articles, it says

"On Thursday, China made its latest move to combat the slowdown, cutting key interest rates — the second rate cut in a month."

Encourage credit card use? It's a bad habbit.

Read the entire thing, please. Beyond the first couple of paragraphs.

Chinese remain among the world’s stingiest consumers. Household consumption in China accounted for a paltry 35 percent of the overall economy in 2010, compared with 71 percent for Americans and 57 percent for Europeans.

The reasons Chinese save more and spend less are complex, stemming in part from tradition and in part from government policies that discourage consumption

 

[Pejsen]

They shouldn't complain

In denmark there's even larger premium before tax and the danish income tax is around 60%.

http://www.youtube.com/watch?v=OAA6dE4DJxE



Oh yeah we also have 25% VAT.