Labor MP asks why Apple costs more in Oz

Labor MP asks why Apple costs more in Oz

Summary: Federal Labor MP Ed Husic last week criticised Apple and other technology giants for asking more in Australia for their products than they do in the US, noting that he would write to the managing director of Apple Australia to demand why the mark-ups occur.

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Federal Labor MP Ed Husic last week criticised Apple and other technology giants for asking more in Australia for their products than they do in the US, noting that he would write to the managing director of Apple Australia to demand why the mark-ups occur.

Husic, MP for the electorate of Chifley in western Sydney, is known for his love of Apple products and even read his maiden speech in October 2010 from his iPad. Husic is following the path trodden by Shadow Communications Minister Malcolm Turnbull, who regularly brings his own Apple tablet into the chamber. Speaking in the House of Representatives last week, Husic said it's "well-known" that he enjoys using Apple products.

"Their sleek, smartly designed products are leading-edge, innovative and help shape the way technology caters to consumers," he said. "Besides their terrific MacBook, I have also been impressed with the iPad, which I am using tonight. It was a great platform from which I read my inaugural speech. I am led to believe I was the first member in this place to do so."

However, Husic added, it is not unusual for Apple's "fervent devotees" to closely examine the iconic technology giant's prices when sold in Australia, compared with their cost in the company's home country of the United States.

For example, he said that after discussing the issue on Twitter last week, he realised that Apple's 13-inch MacBook Pro costs $1399 in Australia, but only $1218 in the US. He also found that the 17-inch model costs $2899 in Australia, but $2700 in the US and the 8GB iPod Touch costs $289 in Australia and $247 in the US. All of these prices are in Australian dollars, with conversion being carried out by Husic based on current exchange rates.

"Going through the Australian Apple website, to buy certain brands of headphones might set you back up to $200 more than buying the same product on Apple's US website," Husic added.

The MP gave Apple some credit, noting that the iPad 2, which went on sale last week, only cost a minimum of $579 in Australia, compared to $543 in the US. However, in general he noted that apart from 10 per cent GST, there was no reason for the price differential.

"It is important to bear in mind that Apple products are generally priced at a higher range to begin with," he said. "On top of that, do not forget that Apple is overwhelmingly the manufacturer, wholesaler and retailer, and, from what I understand, they give resellers little, if any, control over pricing."

"One more noteworthy point is that their products are largely manufactured in China and shipped out from there to both Australia and the US. Consumers are struggling to work out why they are charged way more for these products and they would like some answers. Given the enormous brand loyalty Apple no doubt enjoys, I think there is a valuable opportunity for the company to explain why the same products in the United States cost significantly more here. To help get some answers quickly, overnight I will be writing to Apple Australia's managing director to put some of these differences to him."

Apple has been invited to comment on Husic's speech; any response received from the company will be published in a follow-up article.

Husic also listed other price differences between Australia and the US. For example, he noted that games for Microsoft's Xbox 360 console cost an average of $110 on its release date in Australia, while in the US the cost was around $60. He added that there's a substantial price hike in the cost of buying a Sony PlayStation 3 locally.

"The issue of price differentials frustrates many consumers, particularly when they seek to purchase electronic items," Husic said.

The MP linked the debate to the issue of online retailing, noting that many consumers can easily see, on the internet, the price differentials that exist between products bought in Australia and those purchased overseas.

Price differentials between Australia and the US have existed for many years. For example, when Adobe launched its flagship Creative Suite 5 package in April 2010, it hiked prices substantially for the Australian market. The company's Australian software store listed the full CS5 version of Photoshop as starting at AU$1168. However, in the US, the same software was slated to cost residents there just US$699 — AU$757.48 when converted.

In Australia, CS5 Master Collection was to cost AU$4344 for the full edition, and AU$1503 for the upgrade edition. In the US, the same software will cost US$2599 (AU$2816.45) for the full edition, more than AU$1500 less. The upgrade edition will cost US$899 (AU$974.22) — more than AU$500 less.

In a letter responding to the issue, Adobe said that domestic market conditions significantly affect its local pricing. For example, in many countries outside the US it conducts the majority of its business through channel partnerships. Adobe also said that the cost of doing business is different in different regions.

Over the past year, the value of the Australian dollar has gradually harmonised with the US dollar: US$1 currently buys 97.4 Australian cents. However, the cost of buying software directly from Adobe's online store has not changed. For example, a full copy of Creative Suite 5 still costs $4344 in Australia, but just AU$2534 (US$2599) in the United States, a price difference of about $1810 for the same package.

Topics: Apple, Microsoft, Software Development

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13 comments
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  • Husic just answered his own question as to why Apple products cost more in Australia. Because religious Apple-nuts like him will rush out and buy any product that has an Apple logo on it, regardless of the price.
    scotttt
  • Apple is not too bad these days. Keep in mind the US prices don't include sales tax (GST). You don't expect Apple to adjust prices in step with the fluctuations of the dollar.

    Other companies such as Adobe, Microsoft do charge a sizeable differential between US and AU pricing. Not a lot you are going to do about it as they can charge what the market will bear. Don't like it, buy online and possibly forfeit your warranty rights.
    smbtechpl
  • huh!!! is this kind of a joke...
    Have Husic compared other company products???? By the difference of only $100 Apple is marginally priced same across the world considering the dollar conversion parity. As a matter of fact I always give people example of Apple universal pricing compared to other manufacturers and he is talking something totally opposite or I am missing something here.
    Husic if you want to compare the US pricing of laptops compare that of IBMs and other majors and you will see the difference in double value. Laptop sold in Australia is sold half the price and we talking about price difference of nearly $1500 mark.

    this is rubbish he just trying to create popularity by speaking against the most popular brand in the world. I don't see any other reason.
    naiknb-dc72f
  • I love the irony, a Labor MP asking why labour costs in Australia are higher than in the US?

    why retail trading regulations are more restrictive in Aus than US?

    100 years of Labor in the workers paradise has driven up operating cocts, is it really too hard to see?
    gikku-2ce6c
    • Just FYI, you spelt "Labor" wrong (it's pretty common), it's the "Australian Labor Party"....
      Tinman_au
      • No, he didn't spell 'labour' wrong, that's how you spell it. The Australian Labor Party has a different spelling.

        As for online stores, you're often better off pretending that you are in the USA. There are online re-dispatching services that set up US addresses and CCs.
        meski.oz@...
  • scotttt- Grow up, 'Bill G' has left the building'.
    Don't be a numb-nut, we all benefit from early adopters.
    It's an essential part of the buying cycle.

    Price differential is definitely better than it has been, but he is right.
    We can thank Kogan for the war he started with LCD panels, look at that pricing now.

    More Power to Federal Labor MP Ed Husic, for trying to start dialogue.
    ask412
  • "He also found that the 17-inch model costs $2899 in Australia, but $2700 in the US..."

    So, subtracting the GST component of $289.90 and we have a GST-free cost of.. $2609.10. Now let's convert -that- amount to USD with a conversion rate of $1.02577 and we end up with $2,677.16 USD, almost $23 less than the US amount (and of course excluding the cost of shipping the item back home from the US). If you purchased it and escaped any duty/GST payable on import no doubt you will be financially advantageous - however I very much doubt any Labor MP would advocate dishonesty.. ;)
    Frostilicus
  • Funny using Apple as an example. As shown, it is the 10% GST that makes the difference. US prices never show sales tax because you can have none, State, County and even City sales tax! You can't even avoid it by buying on-line as if the company has a store in your state, you have to pay your state sales tax.

    Apple has, actually, recently reduced some of its prices to take into consideration the strong A$. If only the oil companies were as nice to us.

    Now, though, the other examples were absolutely correct. Local conditions my arse. It's all about how much can they get from us. This is a general pricing issue though, not just technology.

    e.g., going to the movies costs more in australia than in the USA. Reason? Because the market is smaller.... so why does it cost less in New Zealand?

    A $30 pair of Levis in the USA costs $100 here.

    And the list goes on....
    siobhanellis@...
    • Back in the 90s there was a glut of PC memory on the market pushing prices down all over the world, except Australia. Then the "multi-factory contamination" occurred which pushed memory prices sky-high even in Australia.

      Lately, I have been buying memory cards from the u.s., because it's 1/2 price than buying it direct from Asia----and that's including postage!

      So, Asia direct to Australia costs more than Asia half-way round the world to the u.s., and just as far back again to Australia. Can anyone make sense of this? BTW there's no need to further complicate the scenario with tax issues. This is just a measure of market forces alone.

      Walk into your local supermarket and spend $60 on AA NiMH rechargeable batteries. You'll probably come out with 3 blister packs of 4 cells each (total of 12 cells). I just spent that same $60.00 O/S and got 60 individual cells including the postage under $1 each----and better still, I don't have all that excess packaging to throw away.

      Remember when you could go to the hardware store: "Can I please have ONE nut that fits this bolt?"
      Treknology
  • I don't think the Apple prices are that bad, but he really does need to look into the issue of software, especially when it's bought online...
    Tinman_au
  • Is it just me, or are ZDNET censoring comments that might upset Apple... I only ask, because there's a few have disappeared since yesterday.... like the one that put actual dollar for dollar prices in the USA vs Australia... seems odd if you are looking for debate to remove facts rather than opinion.
    Johnnyf50-f8692
  • Hi Johnnyf50,

    I moderate the comments on the site, and I only delete comments which descend into pointless bickering and name calling, spam or defamatory comments.

    Regards,

    Suzanne Tindal
    News Editor
    suzanne.tindal