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How Bad Is The Apple Tax In Australia?

As Apple faces the IT Pricing Inquiry — and the inquiry’s instigator Ed Husic resigns as Government Whip — one Aussie blogger has crunched the numbers on Apple’s pricing strategy down under.

Graham Spencer from MacStories has done the analysis, and it makes for interesting reading, although relatively few of the conclusions are all that surprising if you’ve been following Apple’s hardware and software pricing strategies over the past few years.

Image: macstories

From Spencer’s analysis, Mac hardware is 6.6 per cent more costly here, iPads are 3.6 per cent, iPhones 10.3 per cent and iPods 5.2 per cent. That’s with the GST taken out, which dodges one of the most common mistakes made when comparing US and Australian prices, although conversely Spencer hasn’t applied any US sales taxes. That makes a certain amount of sense because they vary state by state. Some US states have no sales tax, while others tip the scales above the GST. As such, that does make the exact percentage difference a little rubbery, but essentially points out something that’s been known for some time, namely that Apple doesn’t (essentially) charge an “Apple Tax” for its hardware products down under to any excessive degree.

The one hardware statistic I find interesting is the iPhone pricing, if only because they’re quite wildly different markets, and not just in the size of the customer base. Another common mistake (not one that Spencer makes, I should add) is to look at the US “price” for an iPhone at launch (typically $99-$199 or thereabouts) and then complain of the Australian price being in the $600-$1000 price range. That’s confusing a contract downpayment for an outright purchase price, however. When you get an iPhone on contract in Australia the mobile payments are typically built right into the contract, same as with any other smartphone. Australia’s one of the rare countries where Apple has offered outright iPhone sales for some time, whereas in the States it took a long time for that option to emerge. As such, the fact that outright iPhone prices here — where it’s been a factor for a much longer time — are higher is worrying.

What about on the software and apps side? There, the picture is significantly less rosy. Spencer doesn’t remove the GST from his app store calculations on the basis that developers can’t adjust prices regionally, so they have to suck the price up. I do take his point, but that’s a developer-centric view; if it’s fair to include it for developers who have to pay it, why not include it for Apple who also have to pay it? If it is removed there’s near parity across his data sample. The same simply isn’t true for movies, TV shows or music, where the markups are just brutal, although it’s very tough to say what part of that is Apple seeking more profit and which part is Apple paying the rights holders whatever has been negotiated for local access. Whichever it is, it’s still disheartening to look at (for the worst cases within his data) a 72 per cent music markup or 57 per cent SD new release movie markup and not feel ripped off. Although that 72 per cent figure is for a Justin Timberlake album. I might have just kept my money in my pocket in that case.