Kiwis pay high premiumfor tech goods
Kiwis are paying a premium for some consumer technology products and software, in some cases shelling out over 40 per cent more than shoppers in the United States.
The disparities in pricing are in spite of the sustained strength of the New Zealand dollar, and even extend to software distributed online, such as music and games through Apple iTunes.
The pricing of software and other consumer IT goods has become a hot issue in Australia, prompting a parliamentary inquiry. New Zealand Communications and Information Technology Minister Amy Adams has said she is watching the inquiry closely to determine if similar action is needed here.
PC World editor Zara Baxter said Kiwis paid significantly more for smartphones and laptops in particular, while other products such as tablet computers – including the iPad Mini – seemed more evenly priced.
New Zealand had a higher GST rate than either Australia or the US, ‘‘but there are some products where the price differential is just massive and ridiculous’’, Baxter said.
A Dell 18X Alienware laptop retailed for about US$1999 in the US but cost $4699 (equivalent to US$3870 at current exchange rates) through Dell’s New Zealand website, she said.
In some cases, higher prices could be partly explained by better or different features for local markets, she said.
Manufacturers also frequently cited New Zealand’s more stringent warranty obligations under the Consumer Guarantees Act for higher prices here.
‘‘Because we’re such a small market, we’re almost inevitably going to pay more than Australia and the US because we don’t have the economies of scale.’’
She said vendors and telcos tried to maximise their economies of scale to help keep costs down – for example, by bringing in more units but fewer products, but this had the effect of reducing choice in the market.
Baxter said Kiwis also typically paid over the odds for software, such as music and apps through Apple iTunes – which were downloaded digitally and so did not incur shipping and distribution costs.
Kiwis looking to get around geographical pricing could order products online from US sites to get US pricing, she said.
But buying on US sites meant Kiwis would have to pay GST and Customs charges once the product arrived in New Zealand – which could be expensive.
One source working in IT procurement said higher pricing for New Zealand could be justified in some cases, due to shipping and GST costs and the tiny size of the market here.
But there were cases where Kiwis were ‘‘getting screwed’’ on price, because the market here was so isolated, he said.
Chris O’Connell, board member and spokesman for the Telecommunications Users Association, said vendors charged what they knew they could get away with.
‘‘With products like the iPhone, where demand always exceeds supply, they know there are always people willing to pay over the odds. I know people who have flown to America just to get new ‘i’ products . . . we’re victims of our own gullibility.’’
Some companies converted their software downloads to the US dollar rate, but others hit consumers with geographic pricing, he said.
‘‘That’s an issue governments should look at. It is impeding innovation and development here. If a business has to pay more simply to get the software it needs to operate here, that puts New Zealand at a disadvantage against Australia, Singapore and the US.’’
Many consumers were sidestepping higher local pricing through parallel imports, services such as Youshop, and buying via friends living overseas, he said.
Samsung’s Galaxy Note II was about 30 per cent more expensive here than in the US when it was launched.
Samsung head of telecommunications Stefan Lecchi said it did not set retail prices for mobile products in New Zealand, and telcos could sell handsets below the wholesale price if a customer committed to a certain contract.
Microsoft users can upgrade to Windows 8 Pro for $49.99 – a similar price to Australia and the US. But Kiwis downloading Microsoft Office 2010 from the Microsoft website will pay 42 per cent more than US consumers.