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Parliament Probes Technology Price Gouge

#1 User is offline   Ken Gracey 

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Posted 01 May 2012 - 08:06 AM

Apple and Microsoft will be among technology companies asked to explain to Parliament why Australians pay much more for music and game downloads from iTunes, for example, than overseas customers.

as a side note, can i say about damn time !!!!

full story at SMH
Come on 20K




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#2 User is offline   pegi 

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Posted 01 May 2012 - 01:32 PM

Totally agree, it is about time that we stopped being gouged because ...they basically can get away with it and nobody says anything. It feels like we are the backwaters of the US . Use and abuse.


I just posted a link where people can obtain a US address to buy things over there.



View PostKen Gracey, on 01 May 2012 - 08:06 AM, said:


Apple and Microsoft will be among technology companies asked to explain to Parliament why Australians pay much more for music and game downloads from iTunes, for example, than overseas customers.

as a side note, can i say about damn time !!!!

full story at SMH

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#3 User is offline   bitingmidge 

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Posted 01 May 2012 - 04:26 PM

I agree, but it's not hard to see the outcome.

Software companies will claim (rightly) that the cost of providing support in Aus is disproportionate to the rest of the world, because wages and infrastructure costs are disproportionately high and the market is very small.

I would like a choice. I'd buy in the US and skype my after sales call any time!

Cheers,

P
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#4 User is offline   pegi 

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Posted 01 May 2012 - 05:57 PM

I beg to disagree, how can you say that support in australia is more expensive when 90% of support is located in India, the Philippines and even routed to the US? I rang Apple Australia several times for a product a couple of years ago, I spoke to a guy in Chicago. They are trained especially to deal with Australian queries. The same for LENovo computers several years back and that was bought at Dick Smith and all correspondence and dealing were in : 1. Malaysia, 2. Philippines, 3. New York and Singapore and Toronto.

With today's technology this argument is the weakest I have seen so far.

P. have a look at my posting of obtaining an address in the US if that works!



View Postbitingmidge, on 01 May 2012 - 04:26 PM, said:

I agree, but it's not hard to see the outcome.

Software companies will claim (rightly) that the cost of providing support in Aus is disproportionate to the rest of the world, because wages and infrastructure costs are disproportionately high and the market is very small.

I would like a choice. I'd buy in the US and skype my after sales call any time!

Cheers,

P

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#5 User is offline   JZ 

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Posted 01 May 2012 - 08:10 PM

Pricing needs to be fixed in Australia. This is a big problem. It's not just tech it's everything.
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#6 User is offline   arcanedevice 

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Posted 02 May 2012 - 09:31 AM

View PostKen Gracey, on 01 May 2012 - 09:06 AM, said:

Apple and Microsoft will be among technology companies asked to explain to Parliament why Australians pay much more for music and game downloads from iTunes, for example, than overseas customers.


And watch for the big raised middle finger! While I don't agree with their pricing models, at the end of the day nothing will change and their view will be if you don't like it, buy something else...
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#7 User is offline   Dave Bullard 

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Posted 02 May 2012 - 11:44 AM

It really isn't a simple issue. Some of you might remember a letter to the editor on this issue, and the reply we published from Adobe in June 2010. Though it's a little old now, it gives food for thought:

I'm one who just has to have the latest and greatest, so when Adobe Creative Suite 5 was announced I went to pre-order it. But the price!!!! In Australia to upgrade from CS4 it is A$1001 while our US cousins will pay US$599 (on today's rates that is $655).

How can Adobe justify this????

In a call today to Adobe Systems' Sydney office their sales representative was very non committal regarding this pricing discrepancy and referred to such things as currency fluctuations, etc, as being the reasons why. I find this an insult to my intelligence and a slap in the face as a long time Adobe user (since Photoshop 2.5) as no amount of tax, duty or freight on a small package can equate to an additional $350.

I was referred to a US customer service supervisor who has said similar. Both representatives were not really wanting to say too much to me and are supposedly referring the query up the chain of command. We will see where that goes.

I will be in the US in a few weeks time so I suggested to the Australian representative that I may try to buy it there. I was told that I may possibly be able to do this but that if I do then I would receive NO technical support. This is a ridiculous statement to make in this day and age of “consumer awareisim” and interestingly all support to the best of my knowledge is US based anyway.

I seriously doubt that a purchase using my Australian-purchased CS, CS2, CS3, CS4 or old FreeHand serial numbers will allow an upgrade from the US, anyway.

Just thought you might be interested in this matter and maybe you could jump on the band wagon and get involved. This sort of pricing discrepancy will only lead to the destruction of Adobe's customer base in Australia .Watch out, Adobe there are now some alternative products out there now – we Aussies are not stupid!!!

Bruce Symons
Mooloolaba, QLD


ANSWER: Adobe ANZ group marketing manager Calum Russell replies: We are very proud of CS5, and believe it is going to add enormous value to our extensive customer community in Australia, New Zealand and globally, by broadening their ability to bring their creative concepts to a range of media and saving time and money through faster, easier execution.

CS5 epitomises Adobe’s promise to revolutionise how the world engages with ideas and information.

In your letter, you highlighted the area of pricing outside of US and why that pricing appears to differ between markets. We wanted to respond to this as Adobe takes seriously its commitment to making sure all customers, wherever they are, have access to Adobe’s tools as equitably as possible.

We establish our prices for Creative Suite products in US dollars, Australian dollars, Euros, Yen and the British Pound on a regional basis using a consistent methodology which takes into consideration local market conditions, how we deliver and support our products in that market, and local market research.

Local market conditions significantly influence our pricing. These conditions include the costs of doing business in different regions.

In Australia and New Zealand, as in many other countries outside North America, we conduct the majority of our business through our retail and licensing channels. We depend on our retail partners in local markets to help us reach as many customers as possible, support those customers, and much more.

In the Asia Pacific region, we set prices in US and Australian dollars, and generally try to avoid price changes through the product lifecycle.

In fact, the pricing for CS5 offers good value for our customers in a number of areas:

* It is now more cost-effective for customers to move from a suite, to the entire Master Collection – we have lowered the price of this by 20 percent.

* The full price for Design Standard is lower than for CS4.

* For existing suite customers, we have lowered upgrade prices by 5 percent.

* Special pricing is available for Acrobat Pro customers who wish to move to Creative Suite.

* We also continue to add astonishing innovation to our products, adding new value to the suite without increasing the pricing. For example, in CS5 we have added Flash Catalyst to CS5 Design Premium, Web Premium, Production Premium and Master Collection.

* In addition, CS5 customers can enjoy five online services, free of charge for the first year.

We believe these innovations, together with the value represented by the quantum-leap product features now available in CS5, make it genuinely good value for those professionals who will be using it.

What Adobe delivers to creative professionals, is mission-critical software. Our products are priced appropriately for the value that is delivered, and to reflect the investment we make in research and development; as well as the cost of bringing the software to markets globally including Australia and New Zealand.
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Posted 02 May 2012 - 08:52 PM

Sorry Dave, I disagree - the excuse from Adobe bears no weight or honesty at all.

If I download software from the net it costs Adobe no more than it does if i was located anywhere else in the world. Sure, a boxed version MAY cost more to ship, but nowhere near the price difference they impose. Even with shipping and taxes there is still a massive difference.

If they claim it is support costs that are higher, have you ever tried to get support from Adobe? If you can ever get through to them to speak with a human, you end up speaking to someone outside Australia anyway...
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#9 User is offline   Ken Gracey 

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Posted 02 May 2012 - 09:03 PM

I totally agree JZ, if that's adobes excuse, it's sucks and if thats the best explanation than come up with my interest in ever buying another piece of adobe software is zero !
Come on 20K




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#10 User is offline   arcanedevice 

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Posted 02 May 2012 - 09:09 PM

And another point - if what Adobe say is true, why the price differences in their download software but not their downloadable reference materials from adobepress.com?
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#11 User is offline   Dave Bullard 

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Posted 03 May 2012 - 08:49 AM

I'm with you, guys. I didn't say I agreed with what Adobe said, but it's interesting to see that letter as an example of what might be coming up ...

Cheers
Dave
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#12 User is offline   BrianB 

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Posted 03 May 2012 - 01:52 PM

As a whole in Australia we are screwed when it comes to buying most things including software. But it's software that is the most outrageously priced especially when you buy it online.

There really is no excuse for being charged extra in Australia on an internet download, hence why Apple eventually changed the pricing structure on the Aussie App Store.... I felt totally annoyed and ripped knowing that i was paying more for an App than the US when our dollar is on par and sometimes stronger.

When it comes to physical goods, that's different as there are duties, taxes etc on imported goods that hikes up prices,, but still I think retailers take us for a ride.

Although here in Australia for retailers to make a profit and survive they need to hike up prices as the demand for goods and sales aren't as frequent as in the US or Europe as we don't have the same population.

So it really is a catch 22 for most retailers.
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#13 User is offline   pegi 

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Posted 03 May 2012 - 02:26 PM

I really agree with everything that everyone has said so far. Yes, we are getting screwed alright.

Adobe response is a politician's response. Lots of feeling good words, nicely positively padded, chocolate coated, warm and fuzzy feelings about what they do, circumvoluted and twisted logic that would make our ancestors turned in their grave....the end result is the same....rubbish and you get had! Population argument is a red herring. So, every countries that has a population of less than 25M. get screwed is that it? That is why so many people pirate stuff all the time.

All these companies have enough resources to arrange their affairs, I am sure to make huge profits and still allow a decent profit margins with less populated countries.

Why our elected government allow for these rip off? All these treaties that they signed on our behalf seem to go one way...in the pockets of the large multi nationals.
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Posted 03 May 2012 - 03:51 PM

View Postpegi, on 03 May 2012 - 03:26 PM, said:

Why our elected government allow for these rip off?


Primarily because they can't dictate price on a commercial product without risking the removal of the product from the Australian market, which will be the response of the vendors. They can regulate it, but they cannot enforce a pricing parity.
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Posted 03 May 2012 - 04:08 PM

For software vendors it's a vexed question.

While I am just as annoyed by many of the pricing structures, Dave did mention cost structure for publishing on another thread, which pretty much sets out the conundrum for all products. The facts are simply that most pricing structures in Aus are a product of the costs of doing business, whether online or not. The last time I looked, retailers weren't exactly providing terrific returns to shareholders.

Are software vendors going to be forced to abandon all but online sales to compete? What happens to the boxed sets, the service that we require over the counter occasionally (not that I have ever), if prices are such that a normal retailer can't compete?

View PostBrianB, on 03 May 2012 - 01:52 PM, said:

I think retailers take us for a ride.

Although here in Australia for retailers to make a profit and survive they need to hike up prices as the demand for goods and sales aren't as frequent as in the US or Europe as we don't have the same population.


Australians enjoy very high incomes, a very high percentage of the population earns around the median (the highest in the world I believe: something like 60% of the population) and therefore the cost of providing even the most basic service is extraordinarily high. In the US and Europe for instance, construction and retail environments have artificially low cost structures because of the lack of, or ineffectual labour laws, so that people can be hired for nominal hourly rates.

In Aus, try hiring a senior to work in a sandwich shop on a Sunday for less than $20 per hour, in the US, you'll find someone for $5.00 per hour plus tips if you look hard enough. Sadly these numbers work against all sorts of costs too, property costs reflect rent.

Attitudinally in Aus, we all have an expectation of living well, of making "profit" irrespective of all else. The concept of the "humble shopkeeper" does not exist. If one is in business, one "deserves" a Porsche! In other places if the business derives enough income to pay the bills and on a good week leave enough for a special treat for Sunday lunch, life is deemed to be pretty good!

In much of the world, menial tasks are considered to be of less value than more intricate ones, jobs with high levels of skill are paid at a much higher rate than unskilled ones and so on. In Aus, the difference exists, but overall it is not great. THAT is what puts pressure on retail costs!

Paying more for stuff is the price we pay for accepting the other benefits of living where we do, so stop whinging and get on with it! If you don't like the pricing, buy elsewhere, (As Pegi has noted it's not hard to do) and eventually you'll be buying everything by mail order because there won't be any retailers to whinge about!

Now will some one please launch an enquiry into how it's possible to buy return airline ticket from London to Aus and back for two thirds of the price of one from Aus to London and back?

Cheers,

P
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#16 User is offline   pegi 

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Posted 03 May 2012 - 08:09 PM

You make me laugh, they can't dictate prices ...really???? If price fixing happens between cartels, do you think that they are not some sweet deals and arrangements between/with governments ...Have not you ever heard of how pharmaceuticals companies dictating how much they want or don't want....So , I beg to disagree that prices can't be controlled...Gouging is exactly that... the right to rip off. The laissez faire attitude is called COMMERCIAL....and we pay the price!



View Postarcanedevice, on 03 May 2012 - 03:51 PM, said:

Primarily because they can't dictate price on a commercial product without risking the removal of the product from the Australian market, which will be the response of the vendors. They can regulate it, but they cannot enforce a pricing parity.

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#17 User is offline   pegi 

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Posted 03 May 2012 - 08:17 PM

So, Peter are you saying that because we enjoy a high standard of living ..that gives THEM the right to rip us off?

Because our labour market is more structured, that also give the right to fleece us?

I will not stop whinging, because we should get on with it....what does this mean? do we have to take it and accept that it is Ok to pay double than everybody else?

In order to really sort this out, we should hear out what the Parliamentary Committee comes up with and the dialogues with Companies and how they could solve the problem of Australians paying that much. I am sure there MUST be a solution to this problem and it should be resolved. Let's wait and see.
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Posted 03 May 2012 - 09:59 PM

Pete is saying retailers have higher wage costs and therefore have to charge more for their goods and services. I went into one shop where the owner hadn't taken a salary for months.
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Posted 04 May 2012 - 02:31 AM

View PostSome Random Bloke, on 03 May 2012 - 09:59 PM, said:

Pete is saying retailers have higher wage costs and therefore have to charge more for their goods and services. I went into one shop where the owner hadn't taken a salary for months.

I worked with retailers in that position for a few years!

Yes Pegi, there is a difference between paying a LOT more than we can get things for and being ripped off.

There is a price to pay for the lifestyle we enjoy. Despite what you may think, generally margins in the retail world are very thin indeed. (Ask Colorado or Fletcher Jones, or your local computer shop).

I have a friend who imports shoes, (safety boots). The "Brand" (US) have been in serious discussions with him, because his wholesale price is greater than their US retail. He has shown me his costs (for instance a storeman's actual cost at almost $30 per hour vs the US @$8.00 per hour) and his margins are not excessive despite a 100% markup on the product.

I have just bought a pair of expensive US well know brand of hiking boots in a retail chain store in France, for less than one third of their price in Australia. Everything from interest (2.1% on a commercial loan), electricity (10c/kwhr) to rent and wages reduces the price (and the profit with the same percentage margin).

Apple computer squeeze extraordinary margins out of us, yet their software is (now) among the cheapest of its kind. (compare Aperture to Lightroom for instance!)

All US companies or should I say ALL US companies I've dealt with, have trouble understanding the world outside of the US, and I was a franchisee of a major US chain for a decade so my first hand experience is bitter!

In one case recently my web host (Fatcow.com) was offering discount hosting for $59.00 AUD per year, while in the US it was $2.95 per month. I asked why this was and they immediately charged me the lesser amount. Blurb.com (and I'm happy naming both companies because they have a reasonable response) also have an odd and rarely updated exchange rate. When I questioned them, they happily suggested I simply purchase in US$ for about a 30% reduction!

This is not the issue though. They do not force me to buy here!

Cheers,

P
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Posted 04 May 2012 - 08:15 AM

Peter, I agree with you on the retailing front. It is clear that our costs to pay for our lifestyle is high. I also had a business and i am aware of wages and overall costs of running it. That is why i quit.

I totally agree also that general retail and services prices are over the top. So if software companies see that a plumber charges $150 /200 an hour and starts calculating his salary...without looking at dentists and lawyers.....well, it is easy to deduct that a piece of software at an inflated price comparing to the US is justified non?

The problem is who is doing the ripping off?

My gripe is mainly the online retail/ downloads.
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