Is Apple unaware of the Aussie dollar's strength?
Commentary In all the glitz and glamour of the launch of the "revolutionary" Mac App Store by Apple this morning, the company could have corrected the US-Australian price disparity.
The Australian and US dollars have been floating around parity for the past few months and yet Apple has been silent about any possibility of bringing Australian prices in line with those of the US. The launch of a brand new product with brand new apps would have been a chance for the company to make good on keeping prices relatively fair between the two countries.
But, rather unsurprisingly, I discovered they didn't. For instance Apple's photography application Aperture 3, one of the more expensive apps available to consumers is priced in the US at US$79.99. For Australians, the app costs an additional $20, making it $99.99.
At the current conversion rate, US$79.99 translates to roughly $80.46 Australian at the time of writing. If we take into account the very controversial 10 per cent GST, it puts the cost at around $88. That means Apple is still gouging around $11 from Australian consumers just for this one app.
In this one example we can see the exact reason why so many people have been up in arms over Australian retailers' complaints about consumers buying products overseas that are not subject to the GST.
Leaving aside the fact that applying GST to every DVD, pair of jeans or little trinket bought overseas would be a nightmare for Customs to enforce, it was never about applying GST to goods bought online to make it fairer for Australian retailers, it was about not taking for granted that customers didn't know any better. Australian retailers have been using dollar disparity with the US to their advantage for decades to charge consumers for goods excessively over the top of the conversion rate and the additional GST.
But thanks to the fluctuating US economy, the wonders of the internet and the rise of online shopping, consumers have caught up and have recognised that things aren't equal, which is why they're buying online rather than going back to the overpriced bricks-and-mortar stores.
In Apple's refusal to adjust the cost of apps, songs, TV shows and other products it offers between its US and Australian online stores, we can see exactly how much Australian consumers are being ripped off. And just as the retailers complain, consumers are finding ways to avoid Apple's own gouging by buying US iTunes cards and buying direct from Apple's US store at the lower price.