Lenovo Defends Its Australian Mark-Up

Lenovo is mad, you guys. After it was reported that the ThinkPad Carbon X1 carried a hefty Australia Tax mark-up, the company has finally started to defend itself. The curious thing about the statement you're about to read, though, is that at no point does it apologise for the mark-ups.

We reported last week that the Lenovo ThinkPad Carbon X1 costs $1299 in the US and $1999 in Australia, a shameful mark-up of $700 for the Australian market.

The company has today gone on the record saying that the online price for a Carbon X1 with a 1-year warranty and Windows 7 Home Edition is $1589. The $1999 price reportedly came from a "full RRP" which involved customising the device with a full three-year warranty and full Windows 7 Professional operating system pre-installed.

Here's the statement. Emphasis is added:

Lenovo ANZ is providing clarification on ThinkPad X1 Carbon pricing due to some inaccuracies in articles that have appeared following the launch on Thursday 23 August. The ThinkPad X1 Carbon is available in Australia with a 1 year warranty and a home edition operating system from an ‘AU on-line street price’ of AU$1,589.

In several media reports, the pricing of two different models have been compared. A ThinkPad X1 Carbon with a 3 year warranty and a full Windows 7 professional operating system at 'Full RRP' of AU$1,999 has been compared with a 'US on-line street price' of US$1,299 for a product equipped with a 1 year warranty and a Windows 7 home edition operating system.

Lenovo would like to emphasise the difference between the full 'Recommended Retail Price' versus 'On-line street price'. The price listed on its press release (distributed on Thursday 23 August), AU$1,999, is the Australian ‘Recommended Retail Price’ based on a 3 year warranty and highest level operating system. This is a guide price only and local sellers and the website will decide an appropriate street price under normal market conditions. For example, by accessing the Australian website which reflects the on-line street price, one will find that the ThinkPad X1 Carbon that is available in the US for US$1,329 is available in Australia for AU$1,589.

The difference in street price in Australia vs the USA is because Lenovo provides its local customers with a local warranty, local delivery and local service.

So let's recap: the US will pay $1329 and we Australians will be paying $1589 for the exact same Carbon X1. What Lenovo says it is charging Australians extra for is local warranty, local delivery and local after-sales service. What? The US don't get this also?

So basically what we're being told is that you will pay more for buying Australian, just not quite as much as we first expected. This isn't a victory for anyone.


Comments

    But is it not a fact that providing after service in Australia is a more costly operation than in America?

      Or did I just ruin the whole 'let's whinge about aussie markup' meme we have these days?

        Do you really think Local Australian after-sales service is performed in Australia by Australians?
        Do you really think the cost of providing these for the Australian local market is worth the 100% or so mark-up compared to the US?

          Yes I think the guy that shows up and fixes the computer when its broken is Australian
          yes I think it costs more than in the USA because Australian wages are higher than USA wages

          Yes I think its worth the 100% markup compared to the USA.

            Umm.....most 'repairs' take place over the phone, via remote login or you send it to the repair centre. None of those things cost more in Australia....because they don't have to be done in Australia (except the repair centre but there are only 2 or 3 in Australia for Lenovo, not dozens like in the US)

            Sorry, but it doesn't add up and CERTAINLY not to a 100% markup....

        I'll be sure to remember this when calling the asian based support line voice trained with American accents. We're surely not getting the exact same call centre as the Americans! Those must be Australian jobs!

          Or you can send it to an autherized repair agent to deal with Lenovo for you such as myself(or at least, in a previous job, i'm still certified though). We talk to the business call centers (who are all australian) and we get it done pretty quickly. Plus it's under warranty, so it doesn't cost you anything, and get's done in half the time.

          I guess that's what they could be reffering to by local warranty, local delivery and local service? Who knows.

            Dammit meant to reply to seven_tech, but I guess it sort of applies to your comment :P

    On the same first page of Gizmodo Australia is an article about how to make Apple (or any other tech company I assume) replace goods beyond purchased warranty.

      Purchased warranty? You make it sound like our laws are bad. They may make it coat more for the companies if that is what you mean. We have laws because a 900$ iPhone should not break after one year when a $30 Nokia lasts 5 years. Protects us from getting screwed.

    So basically we are being charged extra for our statutory rights under the Trade Practices Act of 1974

      If that act was still valid then yes but it has now been superseded by the Competition and Consumer Act 2010 :)

    Why should they apologise? Yeah we get charged extra for our rights, you can't get more for less.

      Its correct that with a lot of tech here in Australia we pay more, especially in retail due to our warranties and rights we have here with fair trade and all. Our warranties far out way the US in the way of consumer rights and manufacturer and/or retailer responsibility with the quality guarantee of anything we buy.
      I asked someone recently who owns and runs a local PC shop why retail or locally supplied prices are so inflated, he used to have a good position in some tech company and explained it all to me.

      I mean, say you only get a 1 year warranty on a TV from Harvey Norman and 13 months down the track it dies, you have the legal right to go to your store and demand it be replaced or fixed under fair trade law.

      Any product must be sold of satisfactory condition and quality and a brand new product such as a TV should not stop working after 13 months, hence fair trade says it was not of satisfactory quality and must have been defective from the start so the warranty must be honored even though the official warranty has expired.

      It was an ongoing thing on Today Tonight and a Current Affair a while ago.

      As someone stated above we pay extra to protect us from getting screwed.

    Err Clee ... why don't you just admit you work for Lenovo or one of their agencies? No Aussie would defend an excessive markup unless they were paid to do so. Out yourself, hun!

      Just saw this article highlight below from Lifehacker about the iphone and the stuff I just mentioned lol how ironic
      http://www.lifehacker.com.au/2012/08/how-to-get-apple-to-replace-a-defective-out-of-warranty-iphone-in-australia/

        This was meant to be a reply to my last one above lol

      Why wouldn't they? The only reason I can think of that you might not is if you were an ignoramous or someone too self-absorbed to see that the world doesn't exist purely to satisfy your own wants and desires.

    Lets face it, the only time we can complain is for digital products delivered electronically. Every product that is handled at all is going to cost more. It costs money to get a container off a warf, stevadores are second only to shearers for not being happy with their pay rate. The courier who delivers it to your door gets paid more over here and it probably costs more to run his vehicle, anyone who you deal with locally for the product will be paid more and of course if the company has offices here they are going to be paying our government taxes which are probably higher. If you don't like the prices we pay then be a man and take a pay cut, while wages keep rising so will costs so these wages can be paid.

      Freddy, I don't believe that's true. All those extras that you've spoken about, they usually get accounted for under "shipping costs" which is extra and independent of the cost of the product itself, shipping costs are also not subject to tax.

        No tax on what you say are shipping costs? Gst is a tax on that service. Payg is a tax paid by the workers who conduct that service. Freddy is right...

    Does the US price include taxes? Aussie price includes GST, but what about the US price? Don't they usually leave out the tax in their pricing?

    But given that, the Aussie dollar is still stronger than the US dollar which just adds to the price difference...

      US taxes are screwed, states set the level. So it is different everywhere. 5, 20 or even zero. We have a flat 10%, UK have a 25%? VAT

    Take off the GST and it's only a $100 difference. Covers shipping, local markup, and local trade practice rights.

      Actually wouldn't the 10% be the price before it was that? So say it was 1300 & after GST that puts on another 130 dollars, which would make it 1,430 10% of that is 143 so yeah =P

    As I said in the thread that Lenovo and its shills found so offensive... I was looking forward to buying a Carbon.

    However, I won't buy anything from Lenovo now, because I am boycotting those manufacturers who charge Australians much more.

    If anything, Lenovo's lame attempt to justify the increased cost makes me more determined not to buy one.

    BTW, I have worked with a PC manufacturer, and from my perspective these claims of ''higher local support costs'' are slightly true, but in no way justify the extent of the higher local markups. Most of the additional price is just straight out ''charging what the market will bear''.

      If the US price is without tax and ours is with GST (by law is has to be) then the pre tax price is almost identical to the US price. Right? I think if that is correct then you are a little emotional about this. If not true, far enough we are paying $100 top much.

    "local delivery" Why do these companys always mention shipping to Aus like its something that the rest of the world dont pay. These products have much less to travel to come to AU compared US. What a crock.

    I would buy this argument, and this laptop (because I'd really like to own this laptop), if this was the only markup here. But after looking at both the US and AU configurators, Lenovo charge $280 USD for an upgrade from a 128GB SSD to a 256GB SSD, but the same upgrade costs $630 AUD! I doubt I could even find a reputable dealer willing to sell me a 256GB SSD for that price.

    If the only difference was a warranty excess in Australia, then I find it difficult to understand this discrepancy.

    The further problem is that even though I would really like to own this laptop, I can't bring myself to knowingly be ripped off like this.

    Why would such mark ups only apply to Lenovo?

    Most of us dont even need the after sales service, can't they offer one without? I dont like paying for a service that I dont need.

    US prices always exclude GST, AU doesn't, so it truth just that puts the US price up to $1460, the the difference is, in reality only around $130, which is really not that much considering how tiny the AU Market is, and how expensive local labour is.

    So Lenovo change the price (their website still lists the original price at $1999), and we're supposed to forgive now? They were caught. Now they're stepping back.

    The dollar is at all time high. If we were back to the AUS$1 = 75c US it would be ridiculously expensive. Nonetheless the current parity with the USD shows how much retailers are ripping off Aust consumers.

    Luke, are you really this stupid? Wages in the US are half what they are here. Property prices in the US are half what they are here. Transport costs in the US are a tiny fraction of what they are here. Given different consumer laws, the average cost of meeting warranty obligations is probably much less in the US than it is here, too. And all this comes before you consider the economies of scale provided by a US market that is 12 or 13 times greater than ours.

    To put it another way, at the minimum Australian wage of around $17 an hour it will take less than 100 hours to earn enough to buy one of these. At the minimum US wage of around $8 an hour it will take more than 160 hours to earn enough money to buy the exact same laptop there. So it is clear that this laptop is far more affordable here in Australia than it is in the US, so stop carrying on like a 5 year-old.

      Clearly you fail to understand the term "global market".

    Service in Australia means massive markup. Personally I've never had to take a computer back out needed help in any way, shape, or form. However, I have never had a Lenovo. Do they break often? Seems the only logical conclusion to me.

    We are lucky to have ACCC and VCAT. American just passed a consumer protection act not long ago. Yeah they have A LOT of work to do to protect their consumers.....

    Configured a low, mid and top range X1 Carbon with identical specs, on the Australian and US sites yesterday. The low spec version was $433 more in Australia, the mid spec version was $778 more in Australia and the top end specced version was a very ugly $1546.80 more in Australia. It's the same machine!!!!! Lenovo is price gouging the Aussie market big time with this one. I want it, i need a new laptop, but i just can't do it while Lenovo do this, and i urge you not to as well, don't buy it, wait till it comes down or go buy a Zenbook, MBA or 9 Series!

    Stop whining and vote with your dollars.

    To those who believe they deserve cheaper prices, there's two options: move to the USA (and do everyone else a favour), or become a distributor, and prove everyone else wrong.

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