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Aussie pricing ripoff

Why are Australians still being asked to pay too much for Office 2013?

Last week we looked at the Aussie pricing for Office 2013 which is higher than the US prices though that’s hardly anything new since Microsoft has overpriced Office ‘down under’ for as long as we can remember.


Let us preface this article by saying that we tried to get Microsoft’s side of the story. We asked Microsoft Australia for comment – our email was read but no acknowledgement nor reply has been received. We deliberately waited long past deadline to afford the company more than enough time to respond.

The best reason we can think of is simple … Microsoft Australia charges what they think Australians will pay for the product. And over the years they’ve been proved right.

Microsoft charges what they think the market will bear, as any company does. Their experience over many years is that, despite complaints from customers and politicians, Aussies buy Microsoft products in enormous numbers.

The price difference for the cheaper mainstream products is relatively low (3 to 11% in our calculation) but as the products get more specialized and more expensive, Microsoft charges more; 30 to 40% more for Office 2013 Professional in Australia.

Last century some of Microsoft’s reasons for higher prices had some validity – there were shipping costs of boxed product and some support costs though those reasons were exaggerated.

Microsoft subsidiaries do have to provide local support but so does Microsoft in the USA. Local MSFT offices have the great advantage of the enormous support and marketing resources available to them from head office. Over time support has been largely offloaded to the web or global call centers. In any event, aside from installation, Microsoft charges for support.

Shipping isn’t a large cost. For Office 2013 the box product is tiny and light, just small enough for the DVD inside. That’s assuming there’s a DVD provided at all and it’s not a download instead.

In Canberra, Microsoft and Apple have been summoned to a federal parliamentary committee to explain why Australian pricing is so much higher. You can call us jaded and cynical but it looks like an election year stunt that will amount to nothing. The politicians will make the right noises and the company reps will issue the appropriate platitudes.

The situation will continue for as long as the companies think they can charge the higher prices and people pay. The only way it will change is if people stop buying products overpriced in Australia.

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