MBP price variance across the pacific is now obscene.

[IJ Reilly]

There is a perspective from which what you say here is correct. Apple's perspective.

It's the realistic, accurate perspective. It's they way pricing works, the way it has always worked, and the way it will always continue to work. You may dislike this reality now, but you'll like it a whole lot better when your national currency becomes relatively weak.

Meanwhile, I think all of you Australians need to take a pay cut. Obviously, in US dollars, you're all now being paid way too much.

 

[tremendous]

There is a perspective from which what you say here is correct. Apple's perspective. You don't happen to work for them you you? (jks! lol) Yes it is every retail companies job to attempt to sell products in each local market at the highest prices they can get away with there. I've worked a fair bit in big ticket retail and I know that the prices we post on the products are almost always higher than the price we were willing to sell them at if the customer made the attempt to negotiate. Apple don't use this "negotiation" model on an individual level (a luxury they can afford because they have a tight control of their product range and a unique market position not entirely unlike a monopoly) - but in Australia like any market they can be forced to negotiate their prices if consumers as a whole group will not pay the prices they are attempting to charge. This is I guess what I'm advocating here - I'm simply raising the issue that says "hey guys - if apple can sell their machines in the US market at significantly lower prices than here and still run a profitable business then aussie consumers should wake up and object because our objections (and by extension reduced consumption of their product) are the only thing that will motivate apple to lower their prices to a more reasonable level". So I don't mean to dismiss what you are saying out of hand. The reality is however that our world has an increasingly globalized economy and in that environment there is an upward limit on how much any company can get away with instituting disparity between their prices in different local markets. That upward limit must surely be the point at which the travel costs between the two added to the price of the product in the cheaper market are lower than the price of the product in the more expensive market!! And the Aussie market is now reaching that point. Again this is measurable not only against the US market - but also against a number of other regionally closer local markets.

sorry you don't really understand global economics.

 

[gkarris]

Maybe there's import tax on computing goods?

 

[Littlehoof]

well this is getting rather off topic - but what the hey...

It's the realistic, accurate perspective. It's they way pricing works, the way it has always worked, and the way it will always continue to work. You may dislike this reality now, but you'll like it a whole lot better when your national currency becomes relatively weak.

I'm going to be blunt - this isn't intended to be rude but it may sound it - you're replies to my posts seem somewhat arrogant and attempt to dismiss my core points by making out of context quotes and then rebutting the insinuated meaning of those quotes. Case in point you quoted only the first line of my last post and ignored the rest of what I had to say in your reply while trying to make it sound like I had conceded and you have some superior view to mine... In every reply I have made to you I have quoted all you have said and attempted to address the main points you were making - this is the basis of discussion instead of derision.

In fact I have lived through times where the australian currency has dramatically weakened over a short period of time and I can assure you that in those circumstances there are significant price pressures. They are restrained as much as possible by a consuming public reluctant to spend more of their local currency on products that were far less expensive shortly before. So long as there are margins to absorb these differences (some at the consumer end and some at the supply end) the economy will not break - fortunately I have never lived through Australia's economy breaking. I did however live in post soviet russia for 5 months and experienced a very broken economy - it was not pretty. It didn't break for exactly the reasons we're talking about here obviously - but a part of the process was the collapsing currency leading to enormous price pressure and insane runaway inflation. So I'm afraid I have to say outright that your implication that each local market is self contained and not subject to tough times when its currency drops in value is completely false. And during those tough times prices of imported goods do go up as much as consumers can tolerate them. The inverse of that equation therefore should hold true - that when currencies rise dramatically the price of imported goods should fall as much as producers and importers can tolerate them. Obviously its in the interests of companies like apple to avoid this process - but it is the responsibility of consumers to pay attention to their strengthening purchasing power and demand the best possible prices. And this is what I am doing here

Meanwhile, I think all of you Australians need to take a pay cut. Obviously, in US dollars, you're all now being paid way too much.

I'm not sure if this was meant seriously or in jest - but in fact you are right - aussies are being overpaid. We have an economy running far too fast and because of related wage breakout among other things we have rising inflation. This has prompted our reserve bank to raise interest rates of course. Normally these rises would curb inflation by reducing the amount of cash flowing around in the economy. If in my ranting here I can raise awareness of apple's excessive prices and put downward pressure on them then I'll be doing my patriotic duty to help reduce inflation lol Unfortunately the global circumstance is somewhat unussual presently in that you guys over there in the US are bordering on recession and are cutting your rates. This growing variance between our interest rates is pushing the aussie currency up causing complications and so I find myself here discussing the issue of imported goods costs! lol... so it would be terribly helpful if you could arrange for your fed to stop cutting rates and just accept as a nation the recession you have to have If you can manage that I think I can agree that we'll get aussies to take a pay cut what do ya think?

 

[Littlehoof]

Maybe there's import tax on computing goods?

I looked into that here... http://www.customs.gov.au/site/page.cfm?u=4273

I'm no legal expert and its a long document so perhaps I missed the correct classification - but the best I could find to fit the duties on importing a laptop computer would either be to classify it primarily as an LCD device in which case it would attract a 5% import duty or to classify it as a "printed circuit" device in which case it would be duty free.

 

[heatmiser]

As I've always said, vote with your wallet. If it isn't worth it to you, don't buy Apple. You've got to determine just how much having a Mac is worth--even with the knowledge that you're getting ripped off by thousands of dollars. Your choice.

 

[Littlehoof]

sorry you don't really understand global economics.

I won't claim to be an expert - I'm not an economist... I'm sure there are some things I understand and some things I misunderstand. Your dismissive reply however goes nowhere constructive in this conversation. If you have a more informed understanding and wish to correct something I've said then please present that instead of just rudely dismissing what I've had to say and providing no justification for your position.

 

[Littlehoof]

As I've always said, vote with your wallet. If it isn't worth it to you, don't buy Apple. You've got to determine just how much having a Mac is worth--even with the knowledge that you're getting ripped off by thousands of dollars. Your choice.

Certainly true when I decided to buy this MBP I'm on now 8 months or so ago I determined that it was worth the premium price. My point in posting now is to have a conversation that examines whether that value point is still the same. Also from a broader perspective - any company that over prices its products too severely can risk doing their market share damage. Since we're all here to talk about apple I suppose I'm floating the idea that I think apple is running that risk with their prices here in Oz. And from the comments of a couple of other posters in some other places too apparently like Thailand and Poland. Interestingly it sounds like Canada was in a similar position until recently but that it has been rectified somewhat there in today's update as the prices there were dropped. Presumably because their proximity to the US market put more pressure on apple in that region? It seems so far some people have casually agreed and contributed their experiences of the same issue and some have disagreed quite passionately. Its been fun

 

[IJ Reilly]

I'm going to be blunt - this isn't intended to be rude but it may sound it - you're replies to my posts seem somewhat arrogant and attempt to dismiss my core points by making out of context quotes and then rebutting the insinuated meaning of those quotes. Case in point you quoted only the first line of my last post and ignored the rest of what I had to say in your reply while trying to make it sound like I had conceded and you have some superior view to mine... In every reply I have made to you I have quoted all you have said and attempted to address the main points you were making - this is the basis of discussion instead of derision.

First, just because I don't quote back your entire post doesn't mean I haven't read it. I'm trying to address your general argument, rather than attempt to rebut you point by point, and also because I think long quote-backs are tedious and unnecessary for the most part.

The main thing to understand here is that prices of products are set in the markets where they are sold, in the local currency of that market. All companies, and this includes Apple naturally, price their products competitively within that market. Not some other market, not the world. That market. Sometimes this means they make more money in any given market due to favorable exchange rates, sometimes it means they barely make any.

Case in point: If you could purchase the same Chinese products you buy in Australia at the current exchange rate of the Chinese yuan and at the prices the Chinese people pay, I promise you, they'd be far, far less expensive than what you pay for the exact same products in Australia in Australian dollars. Does this mean that the Chinese manufacturers are overcharging you? Of course not. In China, a factory worker makes a few dollars a day. The products are priced for their market in China, and for the Australian market in Australia. So your problem is, you live in Australia, and earn and spend Australian dollars.

Bottom line: Exchange rates and prices of goods abroad should mean absolutely nothing to you. They are a complete abstraction. All that should matter to you is whether any given product is worth what you are being charged for it. The manufacturer's role in this exercise is the obverse.

My joke about Australians making too much money was intended as an illustration of this issue. Australians aren't making any more money now than they were before the US dollar began declining. It only looks like more if you play exchange rate games. Likewise, the price of Apple products haven't gone up. You simply are not getting an automatic discount for a declining US dollar.

 

[Stuart in Oz]

So why doesn't someone start buying the machines in the US and importing them to Australia for resale?

Apple would hate it but they cannot do anything about it in Australia. We have a section in our federal trade practices act that says that companies cannot stop people doing this - it's called Parallel Importing.

The laws were put into effect about five years ago to enable local companies to import legit but cheaper copies of CD's and DVD movies from overseas markets where the situation exactly mirrored what Apple are doing now.

The recording and movie industries screamed and said it would be the end of the earth as we know it but of course they were trying to protect their cosy monopoly profits.

Now, if an Apple reseller tried parallel importing and Apple Australia tried to punish them in any way, Apple would be be prosecuted by the Australian Competition and Consumer Commission in a flash.

 

[Stuart in Oz]

Ah, but we get an automatic price rise when the US dollar rises. Companies are always very quick to pass on any increases from currency exchange but not the reverse.

And Apple is supposed to be one of those companies that cares about its customers a little more than the others.

 

[IJ Reilly]

Ah, but we get an automatic price rise when the US dollar rises. Companies are always very quick to pass on any increases from currency exchange but not the reverse.

And Apple is supposed to be one of those companies that cares about its customers a little more than the others.

I doubt that every much. Again, competition prevents manufacturers from automatically passing along higher costs unless their competitors do the same.

Companies care about making money, first, last, always. If they make products you like at a price you are prepared to pay, then they "care about the consumer."

 

[Littlehoof]

I doubt that every much. Again, competition prevents manufacturers from automatically passing along higher costs unless their competitors do the same.

Thats a nice ideal and there are degrees to which this effect takes place in different industries in australia. However unfortunately I'm afraid that on the whole this just isn't the way it works in real life. I imagine that the US as a far larger more powerful economy is able to insulate itself more fully against price rises when you're currency falls - history has taught exporters never to risk loosing their american consumers - you guys are the ultimate cash cows so to speak. For smaller economies like Australia's we really are buffeted much more significantly by movements in our currency. When it drops prices of imported goods really do go up! Not necessarily to the full % swing of the currency movement but a fair portion of it a lot of the time. And Stuart_In_Oz is quite right and speaks from the same experience I have and most aussies have that the reverse sadly is not often true - importers do not drop those prices back down when the currency here is stronger.

Companies care about making money, first, last, always. If they make products you like at a price you are prepared to pay, then they "care about the consumer."

On this I will agree with you completely. I don't think the price difference is evidence of Apple "not caring". Having had a number of dealings with apple's customer service department since I purchased (my 1st machine had 3 faults on the same issue and had to be replaced and my replacement has already had to have 1 fault repaired) I have always found them to be very helpful and caring. Companies certainly do care about making money first and thats a good thing - they have an obligation to their shareholders and they wouldn't be doing the right thing if they didn't try to make the most money they could. As consumers though we also have an obligation to examine the prices of the products we are purchasing and I'm encouraging this examination. My big disagreement with you and the reason for these ongoing posts is simply your point that the australian market cannot compare our prices to prices in the US or any other market. In an increasingly globalised world we in fact must make those comparisons.

 

[Littlehoof]

So why doesn't someone start buying the machines in the US and importing them to Australia for resale?

For a lot of reasons... One of which is that while the price difference I'm complaining about is significant from a consumers perspective it really wouldn't be from a bulk importers perspective. There just wouldn't be enough margin in that 29.3% to extract any profit from. And the price difference relies on the variance between our currencies remaining stable - in the long term thats certainly not going to happen.

Apple would hate it but they cannot do anything about it in Australia. We have a section in our federal trade practices act that says that companies cannot stop people doing this - it's called Parallel Importing.

If you were going to parallel import Apple products you would still need to go to China for the best price. You would need to be buying wholesale - no retailer is going to have the stock levels you would need nor will they give you a deal where they don't make a significant margin. So you go to an apple wholesaler in China - oh wait the only wholesaler of apple is apple! :S Stumped. They won't sell to you unless you're an authorized dealer. Now if they were an australian wholesaler they can be required by law not to demand that their authorized dealers keep prices at a certain RRP. If they can be shown to be making such demands either explicitly or implicitly they are in huge trouble with the ACCC for retail price maintenance. But as a chinese wholesaler they aren't bound by those laws. And getting authorized is such a long a complicated process that once you are you aren't about to jeopardize it by breaking the agreement you've had to make not to drop the prices below the RRP.

Now, if an Apple reseller tried parallel importing and Apple Australia tried to punish them in any way, Apple would be be prosecuted by the Australian Competition and Consumer Commission in a flash.

If Apple Australia behaved anti-competitively in a demonstrable way yes they could be dragged before the courts - a frightening idea for any small business though to take on a large company with such significant legal resources at their disposal. Apple can simply make the case as soon as you enter the market as a parallel importer though that they have now established certain cost savings in their product flow through that allow them to offer more competitive prices - and then they price you out of the market and destroy you while you are small. Its {{{technically}}} illegal if you could {{{prove}}} that was their intent but they would have no problem at all getting away with it. At any rate it would never get to that stage for the reasons stated above.

 

[Littlehoof]

The main thing to understand here is that prices of products are set in the markets where they are sold, in the local currency of that market. All companies, and this includes Apple naturally, price their products competitively within that market. Not some other market, not the world. That market. Sometimes this means they make more money in any given market due to favorable exchange rates, sometimes it means they barely make any.

Of course this is true. My point is that once the consumers in that market {{{have access to}}} another market offering lower prices and once the costs to those consumers of gaining that access to the cheaper market combined with the price of the goods in the cheaper market is lower than the local price of the same goods the company has clearly overpriced those goods in the more expensive market! Surely you can see this?? With the level of globalization today I now have access as a consumer to american stores. I can literally get on a plane and go there and buy what I want and bring it home. So the Australian market is not isolated from the American market - it is insulated somewhat by distance and currency exchange costs but members of one are not excluded from the other.

Case in point: If you could purchase the same Chinese products you buy in Australia at the current exchange rate of the Chinese yuan and at the prices the Chinese people pay, I promise you, they'd be far, far less expensive than what you pay for the exact same products in Australia in Australian dollars. Does this mean that the Chinese manufacturers are overcharging you? Of course not. In China, a factory worker makes a few dollars a day. The products are priced for their market in China, and for the Australian market in Australia. So your problem is, you live in Australia, and earn and spend Australian dollars.

There are certain products for which this holds true - I don't think you'll find Apple's computers are among them so much. At least not by margins much more significant than the 29.3% we're looking at between the aussie and US markets. And part of the reason companies can get away with those margin differences in China and other developing nations is that those places are typically more isolated markets! There are more difficulties for me to fly to China and buy a computer there than there are for me to fly to the US and buy a computer. 2 quick examples - I speak the same language as in the US but not as in China and I don't need a visa to visit the US but I do to visit china.

Bottom line: Exchange rates and prices of goods abroad should mean absolutely nothing to you. They are a complete abstraction. All that should matter to you is whether any given product is worth what you are being charged for it. The manufacturer's role in this exercise is the obverse.

You say that "all that should matter to you is whether any given product is worth what you are being charged for it" and I agree. What I'm saying is that in order to measure that "worth" it is reasonable to examine what other customers are charged for the same product...

Imagine you and I both lived in the same city and we both went into an apple retail store at the same time. And while we were there we decide to both buy a 17"MBP with exactly the same specs. Now imagine we get to the counter and I'm sold the system at a lower price than you get it for. Would you not start to question the worth of your purchase? Of course there are reasons why this could happen in real life - perhaps I have a student discount or a staff discount - and those are reasons for the disparity you could likely accept and maintain your belief in the worth of your purchase. Surely though you would investigate this price difference to establish why the discount was given to the other customer. Now imagine there were no such reason. You are simply charged more because the salesperson felt he could get away with charging you more. Wouldn't you demand the same price then as the customer before you?

This is effectively what is happening here. You aren't offended by it because you are the one getting the lower price lol! But as we both have access to the same website and I can see your advertised prices are so much cheaper than mine naturally I'm going to question the worth of purchasing.

Now I realize that you are going to say that we {{{can't}}} walk into the same store because I live in a different country to you and so apple can legitimately price their products differently here - but again my point here is that the prices are now so far apart that I can {{{fly}}} to your market and buy there and the cost of the flight added to the purchase I would make in your market would be equivalent to the price here in Australia - that just doesn't make any sense!!

My joke about Australians making too much money was intended as an illustration of this issue. Australians aren't making any more money now than they were before the US dollar began declining. It only looks like more if you play exchange rate games. Likewise, the price of Apple products haven't gone up. You simply are not getting an automatic discount for a declining US dollar.

In fact if we take those dollars overseas we {{{have}}} made more money now than we would have earning those same dollars a year ago. This is exactly why aussies have traditionally coveted jobs in the UK for example - because it gives them access to earning pounds which when they convert back home are worth far more than local currency. You seem to live in a strange world where currency doesn't move between markets - that isn't the real world.