Pricing of computer products not all equal

Are consumers getting a raw deal on the price of locally available computer products?
 
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02.Prices compared

Price comparison: American and Australian prices

$US price [a] [b] $AU price [a] $US price converted
to $AU price [c]
Difference
Windows Vista Ultimate (complete) $399 $751 $436 $315
Windows Vista Ultimate (upgrade) $260 $495 $281 $214
Windows Vista Home Premium (complete) $240 $455 $260 $195
Windows Vista Home Premium (upgrade) $160 $299 $175 $124
Windows Vista Home Basic (complete) $200 $385 $218 $167
Windows Vista Home Basic (upgrade) $100 $199 $108 $91
Apple Time Capsule (500GB) $299 $429 $327 $102
Apple Time Capsule (1TB) $499 $699 $544 $155
Sony 8GB Video MP3 Player 170 $319 $186 $133
HP Officejet Pro K8600 printer $299 $599 $328 $271
Call of Duty 4 PC game
$50
$100
$53
$47

Footnotes

[a] = list price
[b] = not including local taxes
[c] = conversion as at 21 March 2008 ($AU1=$US0.92)

 

Microsoft Vista

Vista boxWhen Microsoft released its new operating system — Windows Vista — many consumers in Australia were shocked at the prices. Vista Home Basic, the entry level version, retails for $385 for the complete package. The US price is $US199.95, approximately $218 in Australian dollars, almost half the cost.

Vista Ultimate retails for around $750 here while in the US it sells for $US399, approximately $436. Even taking into account GST, you’d expect Vista Ultimate to retail for around $500, yet its $750 price tag is 50% more expensive for Australians.

Microsoft's reply
"Our prices vary by region and are determined based on a variety of market specific factors including, but not limited to exchange rate, local taxes, duties, local market conditions and retailer pricing decisions."

Apple Time Capsule

Apple time capsuleThe Apple Time Capsule is an external hard drive and wireless router that is available in 500GB and 1TB versions. But again there’s a significant difference in pricing. For example, in Australia, the smaller 500 GB version retails for $429, while it retails for $US299 (approx $327) in the States.

Similarly the 1TB model retails for $699 in Australia and $US499 in the US, which equates to about $544. Again even with GST the product is at least $100 more expensive here.

Apple's reply
"When calculating Australian price points, we take into account freight, currency exchange fluctuations, Australian GST, Australian standards compliance and other local costs. Pricing shown in the US is ex-tax. Our pricing policy, where possible and taking into account the costs listed above, is competitive with international pricing."

Sony MP3 player

MP3The Sony 8GB Video MP3 player (NWZA818) retails for $319 in Australia and $US169.99 (around $186) in the States. As with the other examples, the price differences are significant and many consumers might wonder why that price is so high.

Sony's reply
"Sony does not produce and freight the same product to all markets. The Australian versions of products need to be adapted to comply with Australian standards and local regulations. Australian marketing expenditure is amortised [divided] across a smaller number of products. Retail environments differ from country to country. [There are] exchange rate considerations. Other countries, including the US, do not include government taxes in their recommended retail prices ... Local prices are set in accordance with what is required to adapt the product to the local market, including freight, tax and local standards. Sony Australia works closely with its key retail partners to offer pricing structures that are realistic and relevant to the Australian market."

HP printer

PrinterThe HP printer range extends from full-scale commercial colour printers right down to home printers. We took one example, the Officejet Pro K8600 colour printer, and compared the prices.

It was a similar result to the other products in the snapshot — the Australian retail price is $599, while the US price is $US299 (approx $328). Again even with GST, the Australian price is well over $200 more expensive.

HP's reply
"There are a variety of factors that are taken into consideration when it comes to product pricing. Prices may vary from region to region and country to country because of different and often disparate market dynamics, sales channels and import taxes and duties, for example."

Call of Duty 4

Call of Duty boxCall of Duty 4 is a popular PC game (also available for Xbox, Nintendo DS and PlayStation 3) that can be bought here and overseas. Again, we found large differences in the prices. For example, the Australian recommended retail price is $99, while it’s listed from $US49.99 (around $53) on Amazon.com.

Additionally, the game can also be purchased as a 'digital download' directly from the Steam online distribution service. Here the product a user downloads is identical no matter where in the world they live — if you download Call of Duty 4 in the US or in Australia, you get exactly the same product.

Yet, via Steam, Call of Duty 4 costs $88.50 for Australians but $US49.95 (approx $53) for Americans, even though there are no extra costs involved such as shipping, local channel, market dynamics or duties at play — if anything the consumer pays for distribution with their ISP fees, yet it costs over 50% more.

Activision's reply
The local arm of Activision, which represents Call of Duty 4, said it is a wholesale pricing company and declined to provide further pricing information.

 

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