Life Tech Most expensive Apple iPhone in history will hit Australian wallets hardest

Most expensive Apple iPhone in history will hit Australian wallets hardest

The iPhone X – pronounced "ten" – will cost Australian consumers much more.
The iPhone X – pronounced "ten" – will cost Australian consumers much more. Photo: Apple
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The most expensive Apple iPhone in the tech giant’s history will cost Australians hundreds of dollars more than users in the United States.

Australians will be slugged – beyond the exchange rate – by as much as $A275 extra.

US consumers will be buying the iPhone X outright for $US999 ($A1245) for the 65GB model and $US1149 ($A1426) for the 265GB device.

Here it will cost $A1579 and $A1829, respectively. Once an average US state tax of 10 per cent is added to the US prices above, Australians are still paying a differential of about $275 on the 65GB model*.

Social media was alight on Wednesday as US consumers complained of the price tag. The reality is Australians were already paying highly uncompetitive prices.

Allan Asher, from the Regulatory Institutions Network (RegNet) and Chair of Foundation for Effective Markets and Governments at the Australian National University (ANU), said he was “annoyed and flabbergasted” at the mark-up.

He said there were a range of causes behind the inflated price.

“Geo-blocking explains a lot in software with iTunes and things like that, where because these products are almost totally owned overseas, the owners of those rights can divide the world up and whack up the prices to whatever they can squeeze out of people,” Mr Asher told The New Daily.

He said policy tended to back intellectual property (IP) owners, such as Apple, instead of consumers.

Australia has banned parallel importing, which Europe allows. He said this would let companies approach an Apple distributor overseas to buy in bulk and sell in local retailers at a lower price. He said this would “undercut the monopoly price” that Apple charges and drive down retail prices.

“But the Australian government is pretty lazy and foolish about these things, and has never acted in the best interests of Australian consumers,” Mr Asher said.

Mr Asher said there was little competition in the market, but was doubtful more diversity could relieve consumers because of the power of the Apple brand name.

He said our low population and market size was partly to blame, and mark-ups known as the “Australia tax” were commonplace.

“If you want the stuff you’ve got to pay, and we do,” he said.

The iPhone X has a full screen
The iPhone X has a full screen. Photo: Apple

Alex Kidman from consumer group agreed the prices appeared unfair to Australians “at first glance”.

“But it’s remarkably close in reality,” he told The New Daily.

Mr Kidman said the listed US price was before state sales taxes were taken into consideration.

“Because the wide state variance in that [tax] means that merchants [including Apple] never quote it in their prices. Here in Australia we have a flat 10 per cent GST. Add that and you’re at $1369 [for the US 64GB model], which gets closer to the local pricing.”

But that still makes a difference in pricing between US and Australian markets of between $249 for the larger model and $275 for the smaller version – on top of the exchange rate.

“Realistically, we’re a smaller market spread over a wide distance, and that plays a part in Apple’s pricing strategy,” Mr Kidman said.

”It’s also a firm that basically never adjusts for currency fluctuations, so even a small-to-moderate rise in the value of the Australian dollar could see the iPhone X become cheaper Down Under.”

The Australian dollar is currently at a two-year high against the US dollar, as the US economy comes to terms with the Hurricane Irma clean-up.

Ed Husic, Shadow Minister for the Digital Economy, said Australians were “regularly ripped off when it comes to tech”.

“For proof, look at the latest iPhone affordability index: Australia’s ranked 25th [out of 57 countries], and we fell seven places in the last year alone.”

He called on Prime Minister Malcolm Turnbull to do more.

“Maybe the next time Malcolm takes a selfie with an average Australian he should think about why he has done next to nothing to stop consumers being ripped off from big tech companies.”

Mr Asher said both major parties had avoided action for decades.

The iPhone 8, which was also revealed this week, will be sold in the US for $US699 ($A871) for the 64GB model and $US799 ($A995) for the 8 Plus.

In Australia, the smartphones will cost $A1079 and $A1229 respectively – representing a slightly more moderate mark-up of $200.

The top-range Samsung model sells in Australia for $1449.

The iPhone X – pronounced “ten” – can be preordered from October 27, and will be available from November 11.

Apple declined to comment on the mark-up.

The New Daily has contacted Trade Minister Steve Ciobo for comment.

  • CLARIFICATION: The calculation of the differential between US and Australian prices has been amended to reflect the application of state sales tax in the US, using an average of 10 per cent.

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