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Bill Bennett


Technology price gouging in New Zealand

Australia’s government wants technology companies to explain why Australians pay more for technology products than US customers.

Our government seems unconcerned that New Zealand gets the same raw deal.

This week Canberra summoned Apple, Microsoft and Adobe to appear before an inquiry.

To be fair, Apple’s hardware prices in Australia and New Zealand are close to US prices. After taxes we pay fractionally more. That’s reasonable given our market size and currency fluctuation. Likewise, most of Microsoft’s NZ prices are roughly in line with the US.

Adobe is something else completely. Some products sell for twice their US price in New Zealand. That’s hard to justify when you realise they are sold as downloads – Adobe doesn’t need to move boxes around the world.

Australia’s government can’t force companies charge reasonable prices – and anyway even attempting that kind of market control would be dangerous. That doesn’t make the inquiry pointless,  getting this information out in the open is good. The publicity puts pressure on companies to behave.

Of course, when they have monopolies – like the one Adobe has on design software – companies don’t have to behave.

Should New Zealand have a price inquiry? I’d say it falls into what Finance Minister calls the “nice to have category”. We particularly don’t need the expense and distraction of holding one when Canberra has already gone to so much trouble. Any benefits the Australians get from the shining a light on international prices will probably rub off on us.

After all, most of these multinationals don’t even recognise New Zealand as a separate market from Australia.



10 thoughts on “Technology price gouging in New Zealand

  1. Vendors in NZ mandate where/which Country their products have to be purchased /ordered from to the local NZ Channel. I have seen many cases where the Vendor decides to shift responsibly to their Australia Office and the pricing increases to support that ANZ operation. Adobe did this about 18 months ago and the NZ pricing rose 15% for the privilege of placing orders on Adobe Australia vs Adobe US. Generally the larger the Australia offices of a vendor the more uplift in pricing when the channel has to move purchasing from US$ to AUD be it an actual increase or a annually adjusted exchange rate fixed by the vendor for their US$ to AUD$ calc. This money does fund lots of highly paid people working for the vendors who in turn contribute to Australia’s economy and occasionally the NZ one too. The simple solution is to buy online from the US and if it is a physical product get NZ Posts “you shop” to bring it down for you. It is interesting to note that this doesn’t effect larger purchases of say Servers because the vendors generally special price the items down to a comparable global price .

    1. This is not a solution because Adobe software is licensed for a specific region. Adobe software that you buy in the US is not licensed to you for use in NZ. Using it here would be analogous to online piracy, so in theory Adobe could prosecute you for (if they found out).

  2. I can’t say I really buy software so I haven’t noticed a disparity, but I’m not surprised. It’s like the digital books & movies etc. costing the same as boxed versions; they’re trying to make money anyway they can without any concern for morals.
    It’s annoying because while technically you can choose another product wrt Adobe and Windows sometimes you really don’t have a choice practically. (It’s not experience in design, it’s experience in Photoshop… >:( )

    There really shouldn’t be any disparity at all wrt to online products as conversion should be left to the banks. The one peice of software I have bought couldn’t care less where I was, just that my PayPal/CC payment went through.

  3. I was surprised at Aussies complaining that tech was cheaper in NZ than Australia. At least you have an Apple Store! And your minimum wages are a heck of a lot higher. Still, it’s shocking that it’s cheaper for an Aussie to jump on a plane to the US and buy Adobe software there than it is to get it locally.

  4. I’ve been looking for a charging case for my iPhone 4S in the usual CE stores in New Zealand. Half of them had nothing and those that did have something wanted close to $100 for it. I really needed something because as a power user, I struggle through a full day to keep my device going. A friend told me about the Deal Extreme web site and said that not only had they had a good experience with it, they ship to NZ for free. So I tried it. For the princely sum of US$19 I ordered a 2300mAH case after reading the reviews. I ordered it, got regular updates on the shipping status, in this case from Singapore. It arrived yesterday as registered mail and I am happy to say it works brilliantly. Next time I need something like that, I will not be going to local stores first, I’ll order on-line, and save myself over 50% on local prices. Brands, distributors and retailers can charge what they like, but I can buy wherever I like. If its something that companies can’t ship to New Zealand, if it is worth the bother, there are solutions for that too. If products can sell in other countries for a certain price and everyone still makes a profit, then why can’t they do the same here and in Aussie?

    1. Don’t get me started on the local consumer electronics stores. OK, you did.

      I think the huge problem here is that the market is dominated by huge chains run by corporations and robotic management, there are few specialists run by people who love their work. They’re all cynical and don’t need to compete in any meaningful way except by slashing prices on big ticket items, then marketing those things to death.

      All of this is why New Zealand badly needs an Apple Store – at least one in Auckland, Wellington and Christchurch. It nothing else it will force anyone who wants to stay in the market to lift their game.

  5. They can be as cynical as they like, all the way to the bank. But I’m really happy with my purchase at around 70% off retail with free delivery from Singapore:)

  6. Think of all the extra Tax they must be paying of this higher cost. Tui moment.

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