Here’s how Apple, Microsoft, and Adobe justify significantly higher tech prices in Australia

australia

Last month, tech giants Apple, Microsoft and Adobe were summoned to explain in a hearing the significantly higher prices of tech goods in Australia. Adobe’s CEO even went as far as dodging the questions during pre-interviews, quite expertly I might add.

Now that the hearing has already taken place, we’ve got the details on each of the companies’ reasons:

Microsoft said that its prices, which include a $2000 increase for Australian consumers for one particular software suit, was based on market competition. When asked specifically about the $2000 mark-up ($4136 compared to only $2324 in the US), the company refused to comment on it. They also said,  “Our customers will vote with their wallets.”

Adobe argued that the personal service being offered to their Australian customers on their website was the reason for them charging up to 167 percent more. They also noted the costs of salaries and their investment in Australian sales channels as reasons for their higher prices.

Finally, Apple argued that the company goes to great lengths to achieve price parity with the US. Surprisingly, they weren’t too far off — the iPhone 5 and iPhone 4s are only 16 percent more expensive in Australia, and the iPhone 4 is actually cheaper than it is in the US. However, Apple did admit to much higher prices for Australians in their iTunes store, and blamed copyright holders who hold on to “old-fashioned notions of country borders or territories or markets.”

What do you think of the excuses explanations the companies provided? Were they enough? Let us know in the comments!

[via MacRumors, Engadget, image via Wikimedia Commons]

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17 comments

  1. lljwagg

    The UK is always stiffed with higher prices too, as an example – in the US an iphone would be $299 US dollars (which is equal to £262 UK pounds by conversion), how come the UK pays £529 for the same spec phone? (£529 UK pounds is equal to $805 US Dollars). Are we being seriously ripped off here? Hmmmmmmmm

  2. Bub

    [@Ashraf]
    Or people and companies will choose to put off upgrading their Windows machines. Your “no alternatives” argument doesn’t apply to Australia any more than it does to the USA, and yet MS has somehow determined that a lower price point makes sense in the USA.

    As for Office, I work in a corporate environment, and find that we increasingly are turning to Google Docs for much of our work. It doesn’t offer as much fancy formatting, but it is far easier to collaborate. And LibreOffice has become a credible alternative.

  3. Ashraf
    Mr. Boss

    [@Bub] I agree that companies will, unless legally restrained, charge as high as the market is willing to pay. High tech prices in Australia have been aroundfor a while now (a decade?) so it seems to be working for these companies so far. The problem with saying they will be checked with alternativea is that there really arent alternatives for many of these products. For example, what will you buy instead of Windows or Mac OS X? Linux? Best of luck if you work in a corporate environment. Office? Same idea. Video games? No alternatives.

    Out of Microsoft, Apple, and Adobe, Adobe is the most vulnerable to alternatives. And even Adobe isnt that vulnerable.

  4. Bub

    To me, Apple’s explanation for the iTunes store made the most sense. But I actually do agree with Microsoft’s unusually candid remark. As a matter of course, companies will charge whatever they believe the market can bear, unless they are constrained by other factors such as regulations. Either some geniuses at Microsoft have figured out that the Australian market can bear a whole lot more than the American market, or they are making a terrible miscalculation, and opening the door for competitors to undercut them.

  5. Ashraf
    Mr. Boss

    [@Enrique] Wait what? How are you able to edit your comments — I didn’t do anything at my end LOL!

    [@johnmw1] Thank you for the feedback and I apologize for any issues that it may be causing you. I’ve made a change to the newsletter; let me know if you like it.

  6. Enrique
    Author/Staff

    [@johnmw1] Agreed! There’s really no way they can justify it when it’s downloadable and not a physical item being shipped to the other side of the world.

    But as more and more things go digital, I think a change will definitely be possible. I’ll make sure to cover anything related to that here on dotTech when it happens.

    Sure, already let him know about your request :)

    Thanks for reading!

  7. johnmw1

    [@Enrique]

    Hi Enrique,

    Sadly it has always been this way, and while I accept that because of our geographical location it will always cost a bit more when you consider shipping etc for electrical items and pc stuff, I just will not pay over the odds for something that is downloadable period.

    I will not be holding my breath waiting for change.

    On a different note I notice the format for our daily newsletter has changed. Could I ask a favour to get Ashraf to give a bigger line spacing between all the new topics, don’t know about anyone else but I struggle to read it because the line spacings are so close and it all runs into one another?

    Cheers,
    John

  8. Enrique
    Author/Staff

    [@johnmw1] Thanks for the input John! It really is ridiculous, it seems like it’s almost double the price in most cases!

    Hang in there, hopefully things will change in the future! :)

    Edit: @Ashraf: Ooh, editable comments less than an hour after mentioning it? This says it all.

  9. johnmw1

    Hi,
    Being one of those Aussies that has always had to pay more I would just like to say what a load of crap. Considering the strength of the Aussie dollar for the last year or so compared to the US dollar it is indeed time to let our wallets do the talking, stuff em all I say.

    It’s not only with software and the like, it’s also most electrical goods ie, I have just bought a new juicer from the US at a cost of $490 which included shipping, but to buy the very same juicer here I could have it for the discounted price of $795 + shipping, I rest my case.

    Cheers,
    John