Tech price gaps will backfire on vendors

It's been a long complaint that Kiwis pay more for their kit because we are a small and distant population.

But for Hewlett-Packard (HP) to expect New Zealanders to pay 40 per cent more than Americans for their new TouchPads is really pushing it.

Does HP think we are that dumb? And doesn't HP realise the damage it is causing their company's own good name through what looks like excessive greed?

HP blames the price difference on GST, freight, economies of scale and the cost of the retail channel. Some price differential seems fair enough, but 40 per cent?

We see similar complaints over the price of Apple products, with some significant differences between what is charged in New Zealand and the USA.

Apple might sell itself as a status brand, but, alas, HP does not have the same cachet. The tablet market is getting a little crowded now, and HP is a mass-market brand. It needs to make itself available to all those price-conscious parents who might buy tablets for their school kids. If HP sells its products at a high price, it will miss out on sales.

Of course, we may decide to buy HP, by purchasing direct from overseas, something that is gaining steam and even led to reports of retail sales being under-recorded due to online purchases.

New Zealand also allows parallel importing and you can see some major price differences charged for certain mobile phones between the parallel importers and the official retailers.

So in the end, Hewlett-Packard's retail price-point may backfire, costing its domestic operations sales and revenue.