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  • News - Written by on Wednesday, May 18, 2011 8:55 - 17 Comments

    Lenovo defends Aussie price hikes

    PC manufacturer Lenovo has mounted a spirited defence of its Australian pricing, despite launching its flagship new ThinkPad X1 laptop in Sydney for $560 more than the same hardware will cost in the United States.

    At a launch event yesterday for the device, which brings a number of new features to the Chinese company’s laptop line-up, company executives said local pricing on the machine would start at $1,959; despite it selling for as little as $1,399 in the US. Executives defended the pricing by saying the company priced “at the local market”, not based on what the value of the Australian dollar was compared to the US. Currently, one Australian dollar buys $1.06 US dollars.

    The logistical cost of bringing machines to the Australian market was greater than in the US, the company said, in addition to an enhanced cost of servicing Australia’s dispersed population. Lenovo Australia managing director Alan Munro cited the “sheer size of supply” to locations such as the US or Europe bringing economies of scale. And costs outside the cities added up. “It’s the most urbanised country in the world — if you’re outside the urban area, it costs more,” he said of Australia.

    “There will be fluctuations in pricing from country to country,” said Lenovo product lead David Heyworth. “We try to ensure they are as minimal as possible. There are service and support issues that we need to maintain here. We feel that at $1959, for an X1 product, which is quite revolutionary, with new standards of managements, processor speeds … we feel it’s a compelling product.”

    Lenovo executives added that the pricing was based on Lenovo’s desire to be competitive in the Australian market — not necessarily on to match parity with the US dollar.

    However, at the launch, the company faced a hostile audience of journalists who expressed their own frustration and that of their readers about ongoing price differences between Australia and other countries on the part of technology manufacturers.

    “Shouldn’t you be pricing it at a parity basis, rather than what the market is charging?” one asked. “We had this discussion with Microsoft over Windows 7. Saying that’s what everybody else is doing is not an acceptable answer.”

    And earlier, after a Lenovo response on the pricing issue: “I don’t accept that.”

    Lenovo is billing the X1 itself as its new thinnest laptop — but still with a great deal of processing power and features. The device has a 13″ screen and a number of high-end features — it can come with Intel’s i3, i5 or i7 processors, uses a sturdy ‘Gorilla Glass’ screen from manufacturer Corning, has a new battery which can charge up to 80 percent in 30 minutes and a new backlit keyboard.

    Dolby sound comes in-built, as well as an on-board 3G mobile broadband connection, 720p camera, high definition microphones designed to support Voice over IP telephony and a fingerprint reader. Overall, Heyworth billed the laptop as the most advanced laptop ever made in Lenovo’s ThinkPad line-up. The company acquired the range from IBM some years ago; it has a reputation for quality amongst business users.

    At the event, Heyworth conducted some unusual demonstrations to prove the ThinkPad X1’s durability — dropping a model to the floor from height and then standing on it, and pouring a glass of water over the device’s keyboard. The machine survived fine and was still able to function as normal.

    “I could dance, but I think I should stop dancing before it stops working,” joked Heyworth as he stood on the laptop.

    Image credit: Lenovo

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    1. Posted 18/05/2011 at 9:03 am | Permalink | Reply

      Pfft, if Apple (the grand poobahs of ripping off their AU customers) can get fairly damn close to the US price on their computers, why can’t Lenovo? This support bullshit is just a throw-away line they use so they have something to say when asked this question by intelligent people.

      That Lenovo rep even had the balls to say “Executives defended the pricing by saying the company priced “at the local market”, not based on what the value of the Australian dollar was compared to the US.” – which translates to, “we think Australians will pay this, so that’s what we will charge em”

      However, the X1 is a sweet laptop. Maybe I’ll buy one from the USA…

      • Posted 18/05/2011 at 10:55 am | Permalink | Reply

        True — Apple is the great leveller here. If their prices are quite similar, and fluctuate depending on the exchange rate, why can’t the other vendors do the same? Are they truly so inflexible?

    2. Mark
      Posted 18/05/2011 at 9:14 am | Permalink | Reply

      after taking into account GST thats more than a 30% price difference! And people complain about apple pricing!

    3. Posted 18/05/2011 at 9:15 am | Permalink | Reply

      Defending the indefensible. If I can get one from the US, fed-ex it here with an economy of scale of one, and still be 30% cheaper, that is plain and simple bullshit.

    4. PointZeroOne
      Posted 18/05/2011 at 9:25 am | Permalink | Reply

      I highly doubt the extra shipping requirements is worth another $500 on the price tag.

      They are pricing to the market, because Australians have no other options. If you import from the US you generally don’t have warranty/local support.

      It’s capitalism at its best.

      • Mark
        Posted 18/05/2011 at 9:29 am | Permalink | Reply

        I thought the Lenovo warranty was worldwide?

        • PointZeroOne
          Posted 18/05/2011 at 9:36 am | Permalink | Reply

          It might be, was generalising. I know Acer have world wide warranty if you buy a laptop and you register it in the country you bought it in (often requiring you to prove you live in that country) you can then get it covered under warranty while you travel.

    5. SL
      Posted 18/05/2011 at 9:44 am | Permalink | Reply

      Lenovo please stop the bullshit and ripping of Australian customers. If it cost more to bring the product to Australia then don’t. Retail your product from US or Europe directly to customers here and only have a servicing tie-up with any other company locally. That will save you money and us all the pricing grief. But please don’t take us to be gullible. If Dell can do it so can you.

      A price tag by 30%% to 40% higher than that in US is rubbish, that is one reason I never by your products.

    6. Matthew
      Posted 18/05/2011 at 9:48 am | Permalink | Reply

      I’ve recently bought a Samsung Series 9 from the US – $1,500 base price vs $2,499 in Harvey Norman (on Sale Special – if you can believe it). Even with GST, postage, etc. I’m still $700+ better off. Unbelievable.

    7. Posted 18/05/2011 at 9:53 am | Permalink | Reply

      Economy of scale?! Well, at the same time their price on the ThinkPad L-series and ThinkPad Edge is actually very close to their US-pricing — and sometimes even better! So it is not just Lenovo pricing vs. Apple pricing, but Lenovo vs. Lenovo. It is clear that they want to charge Australians an arm and a leg for their high-end high margin products, because they know most business users would pay for them anyway. Whereas for consumer products they will have to lower the price (and reduce the margin) to be competitive.

      It’s not just Lenovo. Take a look at Dell Latitudes (their business grade laptops) — same thing.

      Lenovo Australia do however run 30-35% off coupons on their T/W-series ThinkPads every 2-3 weeks, which would bring the pricing inline with their US counterpart. Basically you don’t buy from Lenovo Australia unless there’s a promotion.

    8. Sean
      Posted 18/05/2011 at 10:31 am | Permalink | Reply

      Renaissance will you be reviewing the X1? Looks like an awesome notebook.

      • Sean
        Posted 18/05/2011 at 10:33 am | Permalink | Reply

        Lol most awesome autocorrect on my iPad to date. Renaissance LeMay. :)

        • Posted 18/05/2011 at 10:50 am | Permalink | Reply

          lol I should have set that as my Twitter handle :) I would like to review the X1; will contact Lenovo and ask about it. However, from handling it yesterday, I’m happy to issue a qualified ‘excellent’ rating on it (pending battery and performance tests) — build quality was excellent, and probably second only to Apple at this point — I would rank the X1 above anything I’ve seen from Dell, HP etc.

    9. Mike
      Posted 18/05/2011 at 11:52 am | Permalink | Reply

      I’ve been buying Thinkpads since they were introduced by IBM. The latest 10 weeks ago. It wouldn’t charge its battery. No problem I figured, they’ve always had good service. Well I STILL don’t have a replacement. They stuff their customers around with all these conditions and terms which they themselves don’t even understand, come up with lots of excuses, and won’t even extend my warranty to when (if?) I finally get a working machine. Not good enough Lenovo. You’re failing your now EX customers.

    10. Tim
      Posted 18/05/2011 at 3:39 pm | Permalink | Reply

      These excuses are totally invalid. Sure Australia has a large landmass but we have an incredibly un-distributed population. From Wikipedia – About 60% of the population lives in 5 cities (Sydney, Melbourne, Adelaide, Brisbane, Perth) and over 75% is on the East Coast. The world’s 13th largest economy, 1st in a 2008 prosperity Index, and 2nd in a 2010 Human Development Index.

      It blows my mind that foreign companies continually try to extort and exploit us citing the same tired, obsolete reasoning.

    11. peterhau
      Posted 18/05/2011 at 4:19 pm | Permalink | Reply

      I recently changed jobs, not by choice, granted, but I have now found that there is a strange difference between the brands I used to sell and the brand I can now sell. The strange difference is price. you would think that a system assembled in australia is far more expensive than a mass produced system from another country, but it seems that I am wrong. As for lenovo, once they purchased the rights to the Thinkpad brand, i thought we would see a drop in prices. The price remained the same.

      I have been with the new employer for 3-months, they gave me one of the branded notebooks to use and, I have to say, it hasn’t let me down once. It looks good, it works well and it has features that I would have to pay for if it was badged lenovo.

      I reviewed a netbook / tablet recently, on one of the sites I am a member of. This was prior to the X1 Tablet being released, and, after comparing the specs, the only things that the netbook doesn’t have is a 12 inch screen and an i5 processor. It does have a camera, (x1 doesn’t) the ram is the same size and the hard drive is smaller, true. The biggest comparitive difference is the price.

      The model I looked at in the X1 range is $2999.00 inc GST, the netbook (unsurprisingly) is $1705.00 inc GST, but I had to increase the warranty to 3-years RTB, use Win7 pro, Office Pro & a 5GHz / 2.4GHz 802.11a/b/g/n wifi card. funny, I thought it would be more than that…

      maybe it is time to give the locals another look. Innovation starts at home, and there are innovative products coming into the market every day.

      • Posted 01/10/2011 at 1:03 pm | Permalink | Reply

        X1 Tablet? whom a FrankenPad. How many local companies actually produce a laptop from scratch?

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