Apple refreshed its iMac lineup overnight, adding Sandy Bridge processors and Thunderbolt to its desktop machines. But the big question is how Australia fared in the pricing model, given the strength of the Aussie dollar at the moment. The answer is unlikely to keep everyone satisfied.
Comparing pricing between the four base iMac models, there’s a premium of between $200 and $300, depending on the chosen model. The entry level 2.5GHz 21.5-inch model costs $US1,199 in the states and $1,399 over here; the 2.7GHz 21.5 inch model costs $US1,499 in the US and $1,698 in Australia; the 27-inch 2.7GHz sells for $US1,699 in the states compared to $1,949 locally and the top of the line 3.1GHz 27-inch starts at $US1,999 in the US compared to $2,299 in Australia.
But, as usual, that doesn’t tell the whole story.
The US figures don’t include sales tax, while the Australian models have GST pre-loaded. Immediately, that changes the difference between the pricing by more than $100 in every case. Factor in the cost of importing, the economy of scale (for we are a tiny population compared to the US) and the overall higher cost of living in Australia, and the pricing for this generation of iMacs is fairly evenly priced.
That said, it will still be cheaper to buy from the US, especially with the Aussie dollar worth $US1.10 at the moment. But it’s good to know that Apple at least has not gone overboard on its pricing for new hardware.
Its iTunes pricing though… that’s a whole other story.
[Apple]
np
Wednesday, May 4, 2011 at 10:23 AMI have never understood the ¨importing¨ cost being factored in against the US price of products.
They import the finished product from China no differently than we do.
TheTom
Wednesday, May 4, 2011 at 10:36 AMConsidering the number the US import compared with us, and the shorter distance, plus the huge number of extra ships on the US/China shipping corridor, its ALWAYS going to cost more to ship things to Australia.
PeterB
Wednesday, May 4, 2011 at 8:02 PMChina is closer to Australia than America and needs to offset its huge imports from us.
That said Apple is overcharging us by almost exactly 15%, allowing for GST.
Time to make all American corporations toe OUR line, now they desperately want our money. Allow parallel imports and the problem will quickly vanish.
BCK
Wednesday, May 4, 2011 at 7:29 PMNot to forget, if someone offers to by 30x more than you, they will ALWAYS get a better price.
So is the economy of scale of us vs USA.
Donny
Wednesday, May 4, 2011 at 10:35 AMThese things are manufactured in China, with importation to either the USA or Australia is via shipping. They probably do get a marginally cheaper rate to the USA, but to the tune of perhaps $20 a box, when containers are being shipped.
The economy of scale doesn’t really wash out, the difference is the head on a power plug. Everything else is identical.
Apple pays 10% customs excise at the border for all commercial shipments over $1000, for the cost of the goods+their shipment cost. Check. Then another 10% GST is charged to the customer at the point of sale. Check. That is probably the difference, nothing else. Government taxes.
You can’t really calculate that against the US retail price.. you end up over $1399AUD. The base price is below the US price.
If you buy it online via a freight forwarding company, you’ll pay sales tax in the usa, then over $100 shipping anyway.
… and I’m not a great fan of apple.
Painkiller
Wednesday, May 4, 2011 at 10:52 AMPlus if you buy one from the U.S and have it shipped to Aus you are going to pay Duty and GST to customs for any import over $1000.
PeterB
Wednesday, May 4, 2011 at 8:09 PMWhat Duty?
Since the laughingly called AUS-USA Free Trade agreement there is no duty on imports from the States.
PeterB
Wednesday, May 4, 2011 at 8:53 PMI’ve just spoken to my brother who works for an American importer of scientific equipment.
There is NO duty charged on any goods unless there is a directly equivalent product manufactured in Australia. We can safely say that does not apply to Apple’s products.
Macy
Wednesday, May 4, 2011 at 10:40 AMI don’t think they manufacture their stuff in China. You have to consider the tarif (tax) from US to Aus.
Michael
Wednesday, May 4, 2011 at 11:18 AMYou are wrong Macy, its a well known fact that apple manufacture their stuff in China (just like everyone else)
BOB
Wednesday, May 4, 2011 at 11:18 AMIt says assembled in china on the back…
Lukely
Wednesday, May 4, 2011 at 11:19 AMThe mac mini has dropped $100 too.
BenDTU
Wednesday, May 4, 2011 at 11:55 AMOh wow, awesome. That being said I’d rather wait for the Sandy Bridge ones…
Normandy
Wednesday, May 4, 2011 at 11:34 AMwhat other products have dropped in price due to the current Australian to USA pricing?
Owen
Wednesday, May 4, 2011 at 11:36 AM*Its iTunes pricing… (no apostrophe)
Droz
Wednesday, May 4, 2011 at 11:52 AMSorry Owen – did you correct it to have no apostrophe, or are you saying there should be an apostrophe? Time stamps are unclear…
Elly Hart
Wednesday, May 4, 2011 at 11:55 AMSorry – I’ve corrected the apostrophe mistake earlier. Should’ve said so then!
Jonty Reason
Wednesday, May 4, 2011 at 4:41 PMactually it should be iTunes’ pricing (possessive use i.e. the pricing of iTunes)
Daryl
Wednesday, May 4, 2011 at 11:53 AMdunno about Apple but there’s often a 40% markup with imports from the US.
I call it the Australia tax. it’s nothing to do with exchange rates or transport.
I think the importers take a cut because they go to the trouble of importing things by the container load and do the paperwork and pay the charges.
More telling was that Adobe applied the same markup for PS5 which is downloaded and nothing physical is imported.
The 75 cents per dollar masked this but now at $1.10 people are asking why
woodsdog
Wednesday, May 4, 2011 at 11:57 AMWhats funny is in 10-20yrs people will look back on these Global Companies that have different prices for what ever reasons. Global pricing will be the future, you can say economies to scale all you like. Its a global scale in a global sale, they sell em to everyone, not just 2 business’s…
Matt
Wednesday, May 4, 2011 at 12:37 PM$1315.60 after EPP discount in Australia for the 21.5 inch iMac …
21.5-inch: 2.5GHz
* 2.5GHz Quad-Core Intel Core i5
* 1920 x 1080 resolution
* 4GB (two 2GB) memory
* 500GB hard drive1
* AMD Radeon HD 6750M with 512MB
http://store.apple.com.au/epp//
James
Wednesday, May 4, 2011 at 12:59 PMSo glad their product pricing has started to line up.
They went at it with the last refresh of MBPros.
iTunes needs to step up its game for sure. It’s not that hard to make a US iTunes account.
Shane
Wednesday, May 4, 2011 at 1:31 PMAustralia also has Customs charges – whether these are comparable to the US is anyones guess however.
matt
Wednesday, May 4, 2011 at 1:37 PM“…and the overall higher cost of living in Australia”
oh… so they are charging more… just because everyone else is? and so they can get away with it?
that is hardly a good or fair reason!
james
Wednesday, May 4, 2011 at 1:49 PMApple seem to set their pricing based on the exchange rate at the time of launch, hence the prices for the new iMacs compare pretty well with the US prices. Once GST is factored in, there’s about 5% difference in the price – since the exchange rate has moved more than that in the last month, that’s a pretty good deal – I can’t see the exchange rate staying where it is for too long.
Equally, the iTunes price was set back when it was around 60c to the US dollar, hence now it looks particularly expensive. Unless one of the other music services in Australia decide to reduce their prices, Apple have no reason to reduce their own.
PeterB
Wednesday, May 4, 2011 at 8:06 PMNot true, the markup is 15% after adding GST.
Derrick
Wednesday, May 4, 2011 at 3:48 PMI’d like to know how this compares with New Zealand pricing. The NZ dollar is far below that of the Aussie dollar. Pricing starts at NZD$1999, and for the top-o-the-line model it’s NZD$3298. Tax is built-in.
For the first configuration, the USD$1199 equals NZD$1,512.42, meaning an additional cost of only NZD$486.58. Considering import costs, shipping, etc, that seems very fair.
PeterB
Wednesday, May 4, 2011 at 9:46 PMTo summarise:
Apple is currently charging 10% GST + 15% markup on most of their products with some exceptions, such as the Mac Pro which has 10% GST + 20% markup.
There are some extremely high markups on things like AppleCare which costs 60% more in Australia and preinstalled iWork costs 75% more. The iTunes, App and MAS stores are also charging considerably more even for locally sourced content than the States.
The extra cost of supplying an Australian power cord inside a Mac box can not exceed the $1.50 it costs my Brother’s company for the same thing, and is probably the same as a US power cord ex China anyway.
The cost of freight per box of about $20 can not be too much different than to USA. Shanghai to Sydney is 4230 Nautical Miles, to San Francisco it is 6,100 Nautical miles.
There is no duty on manufactured goods which have no Australian equivalent.
The warranty is the same and I presume the consumer protection is better in the States. In the States for example there is an open returns policy within 15 days, no questions asked.
Then there is the odd roundness of the various Apple mark ups. 15% this round and 20% & 25% in the past.
Apple charges more because it can and because Australians pay up like sheep. I suspect the only thing that sets the exact overcharging is how much Apple wants to repatriate to wherever the tax is less, possibly the USA.
What can you do? Raise it with your MP. Suggest that Australia should use its economic clout, whilst we still have it, to rescind anti-parallel importation laws and use the ACCC to break the supplicant deals the USA created by the previous government.
Australia needs to better prepare itself for the inevitable time when the resources boom leaves us vulnerable once more.
Glenn
Wednesday, May 4, 2011 at 9:57 PMIt’s amazing how many people over analyse this.
Apple will make money off us wanting the cool new toys regardless. :)
Cal
Wednesday, May 4, 2011 at 11:37 PMI may be mistaken here but doesn’t Apple need to pay for all the corporate and retail staff, stores etc in Australia with proceeds from sales of their products? I don’t know how they share it out but I would imagine they would want to cover the costs of operations within a country with the sales in that country.
I’m not sure how the labour laws are over in the US but with all our penalty rates, super and so forth I feel the cost of wages per person here would be higher than in the US so that would add some extra overhead that needs to be allocated to each product sale. Not to mention other overhead costs that may be more expensive such as electricity (definitely more expensive here in Australia) that all need to be allocated to the price.
I don’t believe the price difference is solely because apple is ripping Aussies off because they can, I believe the overhead costs of business within Australia impact on those prices as well. It may simply be the overhead factor, I don’t know, but I think it is something everyone needs to consider when looking at the price differences.
PeterB
Thursday, May 5, 2011 at 6:56 PMAll that assumes that Apple has no costs associated with its sales and distribution in the States.
Read up on all the benefits paid to employees in California and how it is breaking the bank there, before making silly statements about we are too expensive.
You may as well argue that there should be a surcharge on Apple sales in New York because it isn’t California, rents and other expenses are higher and Apple’s products need to be shipped a further 4000km from point of entry to the States.
Apple will try to charge what it can, we can change that by not making excuses for being overcharged, and instead work on get the same or better deal as everyone else.
Or are we the fools they take us for?
PeterB
Thursday, May 5, 2011 at 7:12 PMHere’s the real reason:
Apple Australia needs to charge more because all the Macs and Apple software they use in their offices cost more than in the States and they have to recoup their costs.
Macy
Friday, May 6, 2011 at 5:33 PM@ Michael – Wow! Thanks for the correction..I just thought they’re genuine–all US made. Unbelievable!