Australian tech lovers are getting one of the best deals in the world for Apple’s latest iPad model, but they are still paying more than 17% more for the device than in the United States.
Those are the findings from the new iPad Index created by CommSec chief economist Craig James to measure the purchasing power of Australian gadget buyers versus the rest of the world.
His iPad index – which tracks US dollar prices of the 16GB WiFi model across 28 nations – has found Australia has the fifth-cheapest prices in the world, behind the US, Canada, Mexico and Switzerland.
The 16GB WiFi model costs $US599.32 in Australia, while some states in the US that do not charge sales tax (such as Oregon and Montana) have the device for just $US499 – a difference of almost 17%.
While Australian iPad prices are far better than those in Hungary and Denmark, where value added tax of 25% pushes prices to $US755.91 and $702.75 respectively, the data does suggest Australian consumers could be better off shopping overseas for the iPad, or buying while they are travelling to the US or Canada.
“While Australia is one of the cheapest places to buy a base model iPad 2, it’s important to note that the local price is still equivalent to around US$50-60 higher than the US purchase price,” James says.
“Clearly given government reluctance to charge GST on overseas purchases, if a local buyer could get the shipping cost below $60 it would pay to buy an iPad 2 from the US.”
He says one company which allows consumers to buy from the US and ship to Australia can land the device here for $US560, which is a marginal saving.
But as James points out, the price differences become more telling in places like Europe, where the close proximity of countries could make importing an iPad a viable option.
“While Hungary is the dearest place to buy an iPad 2 device, clearly the risk is that buyers will merely take the two hour drive from Budapest to Vienna and save more than 11% on their purchase,” he says.
James says Australian retailers need to keep a close eye on measures such as the iPad index, which highlights the sharp differences between local and overseas pricing, and must be ready to react.
“Australian retailers are already under substantial pressure from consumer conservatism and a strong Aussie dollar and the pressures aren’t likely to ease any time soon. Retailers must constantly keep track of local and overseas pricing, new foreign suppliers offering low shipping costs and exchange rate movements.
“If pricing is not responsive to currency changes then opportunities to purchase abroad quickly open up. Over the five days since the iPad 2 was launched, the Australian dollar has lifted 1.4% against the greenback. With no change in pricing that means the iPad has become US$8.33 more expensive.”
That’s exactly the sort of price movement shop keepers in Australia don’t like to hear about.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
