updated 09:12 pm EDT, Thu March 21, 2013
Apple Australia blames record labels, movie and TV studios for prices
Apple has responded to an Australian government IT pricing inquiry, where it, along with other companies including Microsoft and Adobe, have been accused of price gouging Australian consumers. According to the Sydney Morning Herald, Apple Australia boss Tony King blamed the high prices Australians pay for music, movies and TV shows on the publishers. Apple, he said, charged Australians prices inline with other content providers in the country, whether online or in stores.
"The pricing of this digital content is based on the wholesale prices which are set through negotiated contracts with the record labels, movie studios and TV networks," said Mr King, Apple's vice president for Australia, New Zealand and South Asia. "In Australia, they have often set a higher wholesale price than the price of similar content in the United States," he added.
Australian consumer group Choice found that, despite parity between the Australian currency and the US dollar, consumers in the country paid on average up to 50 percent more for equivalent software and hardware sold in the US. For instance, routinely Australians pay 70 percent more for albums on the iTunes store. Adobe, however, takes this to another level, charging Australians $3175 for its CS6 Design and Web Premium software when it only charges US customers $1899 ($A1820).
Apple has also argued that the pricing of its hardware products on the US store don’t include the 10 percent goods and services tax that is included in the pricing on its Australian website. However, even when this is taken into account, Australians are still typically paying between 3-10 percent more for Apple products than their US counterparts. The iPhone also commands up to a 20 percent premium in Australia, for reasons unexplained.
In response to the fact that Australian dollar is currently sitting above parity with the US, King said that it would both “unduly complex [and] confusing” if the company constantly adjusted its prices according to the exchange rate. Further, he added that Apple’s Australian product prices were affected by "differences between countries in product costs, freight charges, local sales taxes, levies, import duties, channel economics, competition and local laws regarding advertised prices.”
Apple was also recently accused of deliberately hiding from its customers that its Australian warranties were now increased to two years in line with Australian statutory requirements. A clarification published on its website does not appear to indicate that the company will repair or replace defective products after a twelve month period, unless they have purchased an Apple Care extended warranty plan. It will remain to be seen whether consumers are prepared to test Apple’s position on repairs should something go wrong in between 13 and 24 months after the initial sale.
Photo: Sanjiv Sathiah