Back in February, the Australian parliament demanded explanations from Apple, Adobe, and Microsoft over the prices charged for their products down under, with some goods costing as much as 70% more than they do in the United States. Apple has today responded to the inquiry, but don’t expect the Cupertino company to be reducing its prices anytime soon.
According to The Sydney Morning Herald, Apple Australia boss Tony King “blamed ‘old-fashioned notions’ of record labels, movie studios and TV networks for inflated prices of digital media paid by Australians on the iTunes store,” which sometimes leads to mark-ups of over 70%.
“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 King. “In Australia, they have often set a higher wholesale price than the price of similar content in the United States.”
King also argued that the price of Apple’s iTunes content in Australia was comparable to prices from other Australian online stores, which proves competitors are offered the same wholesale pricing.
Labor MP Ed Husic probed King over Apple’s ability to influence the price of digital content, given the stature of the company, but King maintained that “the cards are in the hands of the folks who own the content.”
But what about hardware? Apple can’t blame content providers for that, but there are other factors the company must take into account, including freight charges, local sales taxes, import duties, competition, and local laws regarding advertised prices. What’s more, it also had to contend with exchange rates.
Sometimes devices may appear like they cost more in Australia than they do in the U.S. because of exchange rate fluctuations. But King said that based on last week’s exchange rates, the difference in price on Apple’s entire range of Macs, iPhones, iPads, and iPods was on average just 5%.
Source: The Sydney Morning Herald