Apple Australia Chief to Meet With MP Over Pricing Disparities

[Zeiss]

Australian here.

It is not all about exchange rates and shipping costs and markets paying what they can. Australia has a small population, and high minimum wage, and high taxes. It costs Apple (and others) more to trade and do business here than in the US, Brazil, China etc. An employee in an Apple Store on a Sunday may be earning over $20 per hour (don't quote me - but it is decent).

Software may not be the same, and this is why retail in Australia is tanking, and all the major department stores are posting losses etc.

 

[djgamble]

Wirelessly posted (Mozilla/5.0 (iPod; U; CPU iPhone OS 4_3_2 like Mac OS X; en-gb) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8H7 Safari/6533.18.5)

This is true, but the high Aussie dollar is here to stay for the long haul on current political and economic climates.

Wow, amazing that you can tell the future, but lets go by the current facts: the AUD usually trades in the 75-85 cent range, and like most financial assets tends to revert to the mean. If you think that resources will stay high (which is what is driving the AUD at the moment, along with higher interest rates), then I have a bridge to sell you.

This is just more typical winging Australians. If you don't like the prices then don't buy the product. Apple has every right to charge whatever the market will bear. The problem isn't Apple but Australians willing to pay higher prices.

Australia is a small market with higher costs than the much larger and more efficient US market, and Apple has to offer a fixed price against a fluctuating exchange rate so not surprising things cost more in Aus. The alternatives: import from the US, buy something cheaper, or emigrate. You can't legislate lower prices.

The Aussie dollar is high when compared to the US dollar because the US politicians have to deal with the Tea Party wanting to block everything and downgrade the country's credit rating.

When all the tea bagers are voted out, things will change.

Aussies WANT their dollar to be lower, because higher means they sell less stuff!

 

[djgamble]

Wirelessly posted (Mozilla/5.0 (iPod; U; CPU iPhone OS 4_3_2 like Mac OS X; en-gb) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8H7 Safari/6533.18.5)

Digital downloads are the issue...
Why can't Apple have the option of paying in USD, based on the daily exchange rate? Some days consumers will win, other days they'll pay more. Apple will ALWAYS get the same price coz they are in the USA.

 

[Reason077]

Also the exchange rate should reflect the price. I can buy from a UK store and they reflect real time currency changes.

No they don't. Prices on the UK store are typically only changed when products are updated. Accounting for the 20% VAT included in UK prices, price differences vs. the US are similar to or even higher than Australia. Many other European countries have even bigger mark-ups.

Its actually cheaper to import the goods here then the US and less distance - so why does it cost more if we are all ordering and getting a delivery from the same place?

Distance does not necessarily equal cost. I would be surprised if China->AUS freight (especially air freight, which Apple mostly uses) was much cheaper than China->US.

Secondly, the basic costs of doing business is higher for Apple in Australia compared with the US. Rents on their stores are much higher, wages for their employees are higher. Why shouldn't Apple pass this on in their pricing?

Thirdly, there is always exchange rate risk for a foreign company doing business somewhere like Australia. Exchange rates are volatile and if/when the AUD were to drop 5% or 10% against the USD, Apple could lose out big time. Having a small additional margin built in to your pricing offsets this risk.

I'm sorry but cost of living in australia in general has become a joke and the technology industry need to lead a change in a stable economy instead of a dead one.

Australia certainly has a strong economy, but this has largely been built on the resource boom. The high value of the AUD is eroding and damaging its manufacturing sector as its exports become less competitive.

Resource prices are cyclical - some would argue that with China buying up everything the world can produce, resource prices will never go down - but in the long term they always do, eventually. When the resource boom is over, what will be left?

 

[entropys]

Wirelessly posted (Mozilla/5.0 (iPod; U; CPU iPhone OS 4_3_2 like Mac OS X; en-gb) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8H7 Safari/6533.18.5)



The Aussie dollar is high when compared to the US dollar because the US politicians have to deal with the Tea Party wanting to block everything and downgrade the country's credit rating.

When all the tea bagers are voted out, things will change.

Aussies WANT their dollar to be lower, because higher means they sell less stuff!

.
Oh, dear. I don't give a rats about your yank politics at the moment, except that it will end up hurting everyone else, so here's a basic money hint for free.

The more you expand the amount of money in the system, be it by borrowing some (or a lot in your case) or by printing some aka Quantitative Easing (again, a lot in the US case) the price others are prepared for the USD using other currencies will fall. Hence the AUD is higher relative to the USD, despite uncertainty in commodity markets. It isn't the tea bagger crew that are pursuing and implementing those policies, but Obama.

But don't worry, the fall in the value of the USD is meant to be a feature, as it means your mind bogglingly massive debt is worth less too, and thus hurts all the people who lent your country money. Pity about the inevitable inflation that will come and bite you on your delicate bits eventually. You better hope it isn't stagflation, the inflation that happens when you don't have employment growth.

 

[MyopicPaideia]

Actually Australia is a huge market for Apple and technology in general as we have the most stable economy in the world. So when the US goes under again (which it will) we may end up being one of the highest buyers in the world.

Hmmm... so less than 23 million people are somehow a "huge" market for Apple as opposed to their home country with almost 15 times that at 311 million? AND you guys are going to somehow pull out of your magical hat the most buying power in the world - a world in which you make up only 0.33% of the population and 1.47% of the collective GDP? [http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)]

Get over yourself. There are only 3 markets that an international company the size of Apple consider to be "huge" - The United States, The European Union as a collective unit, and Japan. These three together make up over half the world's "buying power".

There are two other emerging markets that are going to become huge in the next 50 years, and Australia, mate, is not one of them. They are of course China and India.

Australia is always going to be a backwater market, just like Sweden We just were smart enough to go in on th EU so we weren't totally left out in the cold.

----------

Australian here.

It is not all about exchange rates and shipping costs and markets paying what they can. Australia has a small population, and high minimum wage, and high taxes. It costs Apple (and others) more to trade and do business here than in the US, Brazil, China etc. An employee in an Apple Store on a Sunday may be earning over $20 per hour (don't quote me - but it is decent).

Software may not be the same, and this is why retail in Australia is tanking, and all the major department stores are posting losses etc.

This. Plus one to you!

 

[iSamurai]

Aussies WANT their dollar to be lower, because higher means they sell less stuff!

As long as the Chinese economy keeps growing, so will the Aussie dollar from exporting mineral resources. Do remember that the central bank was even considering raising interest rates until the US credit rating was downgraded.

Anyway. Technology stuff aside. I bought a Martin guitar from the US for $750 just recently while it costs A$2000 here -- this basically applies to all other instruments as well. Even though the guitar is made in the US and needs to be imported, I'm left wondering is it the manufacturers or the retailers here that are jacking up the prices to nearly 3x the original price (which seems a bit off the justification that Australia is a smaller market than the States).

 

[BlackMangoTree]

Why are prices more expensive in the Apps store and iTunes Store ?

 

[mdriftmeyer]

Macbook Pro price in US = $1199
Macbook Pro price in EU = €1199 = $1,726.14 (According to xe.com just now)

pretax price for macbook pro in EU = $1,426.56

More than $200 difference....
I don't see why apple need to charge extra 200$ across the atlantic.
If I had extra $10000 lying about I would buy a ticket to new york.
Buy few macbook airs tax free.
and sell it at a modest price of $1500.
For few hours of work I can actually go to US for free
Governments should now accept major currencies for charging VAT.

Import/Export Tariffs add to the increase of the price, before the VAT is added on. The same goes for every country in the globe, based upon trade relationships between US and Foreign nations current agreements.

 

[LeiQQ]

Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_3_5 like Mac OS X; en-us) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8L1 Safari/6533.18.5)

IF you're not a wealthy person, I don't see how you can afford those prices.

Then *who* the hell is buying this stuff? Evidently the "common" Aussies.

Goods are priced at what people are willing to pay. It's as simple as that. Don't get me wrong... if this were food, housing or something essential that would be different. But to protect the supposedly downtrodden from high ipod prices is ridiculous. Not to mention yet another government VAT does no good for the "common" folks it was supposedly designed to help.

That actually doesn't happen everywhere. Take the Chinese housing market. China is building these mega ghost cities. They make residents move out of their homes, pave them over and rebuild housing that the original residents cannot buy nor are given the bank loans to buy. These apartments are left uninhabited and the original residents live 4-6 families in a single level home somewhere else awaiting the time when they will be told to move. Then again the Chinese are communist.

 

[MaxRool]

And it's not just Apple, check out Adobe prices.

Adobe are just as guilty too.

eg

The downloadable version of Adobe Creative Suite 5.5 Web Premium is
US $1799.00

A $2781.62 ex GST in Australia.

 

[teepzo]

Wirelessly posted (Mozilla/5.0 (iPod; U; CPU iPhone OS 4_3_2 like Mac OS X; en-gb) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8H7 Safari/6533.18.5)

Digital downloads are the issue...
Why can't Apple have the option of paying in USD, based on the daily exchange rate? Some days consumers will win, other days they'll pay more. Apple will ALWAYS get the same price coz they are in the USA.

We have this already - its called buying from the US itunes store... Rather simple really.

 

[gnasher729]

Wirelessly posted (Mozilla/5.0 (iPod; U; CPU iPhone OS 4_3_2 like Mac OS X; en-gb) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8H7 Safari/6533.18.5)

Digital downloads are the issue...
Why can't Apple have the option of paying in USD, based on the daily exchange rate? Some days consumers will win, other days they'll pay more. Apple will ALWAYS get the same price coz they are in the USA.

1. I would suspect that offering goods in a country other than the USA with US$ prices will fall foul of consumer protection laws in many, many countries.

2. If customers have the _option_ then Apple will obviously _not_ get always the same price. You would obviously choose the US dollar price when it is cheaper, and the Australian dollar price when that is cheaper.

3. It's not about Apple. Most of the money goes to an app developer, or to the music copyright holder. In the case of music and movies, the price is not set by Apple at all. In the case of apps, the price is set by Apple, and in a quite reasonable way (once everybody realises that US prices are exclusive of sales tax, and Australian or European prices include sales tax).

 

[IllegalFun]

Stop whining...

Here in the UK a 27" iMac 2.7ghz (the standard 27") costs £1399
in the US it costs $1699
convert $1699 to £ and you get £1020
add 20% VAT you get £1220
so buying from the UK store is £180 more expensive, or alternatively, you could have 8Gb RAM installed instead of 4Gb

but the problem here in the UK is the amount of exhanges of currency...
US $ --> Euro --> £
at each conversion the price goes up, because people make money from the exchange...
then factor in the fact that southern Europe are all lazy old men playing Boule, and you realise that the Euro is collapsing, which means stuff in Europe costs more, and so that is then passed onto the £

 

[econgeek]

Talk about Cheeky!

The government imposes a VAT. They imposes import duties. They impose regulations that increase the cost of doing business in Australia.

And then politicians make a public stink about prices being higher in Australia than in other countries!

What more evidence could you want that politicians think people are gullible?

We have the same problem here-- the government spends and spends and spend and then pretends like it has no connection to the economy being bad, bad, bad. And there are americans stupid enough (or more rightly, educated in government schools to not think too much) that believe it!

The president, actually said, to uproarious applause "They say this is just a spending bill, but what do you think stimulus is?" If it isn't obvious, all money spent by government comes out of the economy, all government spending destroys private sector jobs. That's economic reality

 

[jimmc]

Is Parliament investigating why everything costs significantly more in Australia? It is not just imported goods. Food items made in Australia cost more to buy in Australia than food items made in the US cost in the US.

This is just a typical no-name pollie trying to make a name for himself by attacking a "Tall Poppy". You're exactly right, wovel. Australians are getting hosed by virtually everyone due to massively inefficient retailing systems (along with everything else).

I recently was in Japan and saw Australian/Queensland bananas selling for $8/kg, when Coles and Woolies are charging $14! WTF?

You can read some of the issues on a blog I found:

http://www.aussiestoreripoffs.blogspot.com/

 

[Bye Bye Baby]

Wow there are a lot of experts who know nothing about economics in this thread. Not to mention not knowing Australia.

Price differentials in Australia for some products are ridiculous. Apple is not the worst however. But it could improve a little.

Video games are outrageously expensive among other things. So too are televisions and motor cars.

The minister is onto something he is just going about it in the wrong way.

 

[Daffodil]

Why can't Apple have the option of paying in USD, based on the daily exchange rate? Some days consumers will win, other days they'll pay more. Apple will ALWAYS get the same price coz they are in the USA.

Yeah, Amazon gives you this choice, so if you choose USD the exchange rate is up to you and your bank, and I'd say it works pretty well.

We have this already - its called buying from the US itunes store... Rather simple really.

This assumes you have a US credit card - definitely not always the case for people.