Technology companies often ask New Zealanders, like Australians, to pay more for gadgets and software than US customers.
Local prices vary from more-or-less in line with the US all the way to 60% more.
There’s a case for a small markup when companies ship and distribute gadgets to and around our sparsely populated countries. There’s no justification charging more for software sold over the internet.
Gadget makers find it hard squeezing high margins out of New Zealanders for tablet computers. That’s because Apple sells iPads in New Zealand for close to the US price.
At the time of writing the third generation iPad (16GB Wi-Fi model) is NZ$729 including 15% GST.
The same model sells in the US for US$499. Today’s conversion rate makes that around NZ$610, add 15% for GST and you get a shade over NZ$700. That’s close to the official NZ price.
Apple dominates the tablet market. The iPad accounts for more than half of all tablets sold in New Zealand. At the moment it is clearly the best model by a comfortable margin. So NZ$729 is the price benchmark.
Rival hardware brands simply can’t get away with their usual New Zealand markups if they want to sell tablets here. Why would any sane person pay more for an inferior tablet?
So, while Apple’s prices are internationally aligned, there’s no room for price gouging in the tablet market. The question is, could that effect spill over into closely related hardware markets, like portable computers?