news Australians have been left with something of a raw deal from Apple’s launch this morning of new models in its new iPhone, TV and iPad lines, with the giant vendor revealing locals will pay more for the product lines than they previously did and receive some products later.
This morning Apple released details on a bundle of new products. As expected, the company has refreshed its iPhone line, introducing two new models — the iPhone 6S and larger iPhone 6S Plus. The new models add a ‘rose gold’ colour and come with improved specifications across the board, including a screen that is pressure-sensitive and a better camera.
The company also released a revamped Apple TV model for streaming content in lougerooms, as well as a larger iPad with a stylus and keyboard named the iPad Pro, and a revamped version of the iPad Mini.
However, buried in the company’s flurry of announcements this morning was a string of bad news for Australians.
Perhaps the bitterest pill for Australians to swallow will be the cost of the company’s new smartphone models. The iPhone 6s will start at a recommended retail price of AU$1,079 for the 16GB model, A$1,299 for the 64GB model and $1,379 for the 128GB model. The iPhone 6s Plus will sell locally for a RRP of $1,229 for the 16GB model, A$1,379 for the 64GB model and $1,529 for the 128GB model.
In Australian dollars, these prices reflect a substantial hike on the cost of last year’s model of the iPhone. Analysis shows Australians are not paying substantially more than US residents once the currency translation takes place, but because the value of the Australian dollar has shrank substantially over the past year, in Australian dollars the cost of the iPhone is larger than it was in Australian dollars last year.
Australians will receive the new iPhones at the same time as the US and a number of other countries, being able to order the models from this Saturday, 12 September and sales starting from 25 September.
However, this is not the case with the new Apple TV, with Apple not releasing any Australian pricing or availability for the unit. The iPad Pro has not received any Australian pricing yet, although it is slated to ship in November locally, the same time as other countries.
The iPad mini has also been refreshed, but again Australians are destined to be disappointed by the pricing. The original iPad mini started at $369 in Australia, while the new iPad mini 4 will start at $569, ranging up to $989 for a 128GB version with 4G mobile connectivity. The new iPad is available immediately.
opinion/analysis
I wish to point out that I don’t think Apple is doing anything particularly unfair here with its pricing, or, really, with its availability. The company appears to have merely passed currency changes onto customers in a relatively equitable way, and also appears to be attempting to make sure its products are available in Australia at the same time as they are in the US.
However, there is still the fact that the cost in Australian dollars of Apple products now far exceeds what I think most people are comfortable with.
Take the iPhone 6s. While it looks like a great model, is this smartphone really worth (at a minimum) $410 more than Google’s Nexus 6, which retails online for A$669? I don’t think so. The two models will provide much the same functionality, ultimately. Apple does have an edge, but I don’t think it’s a $410 edge.
The same can be said for the company’s tablet offerings. Google currently sells a Nexus 9 Android tablet starting at A$479, whereas the most minimal model of the iPad mini is going to set you back at least A$569.
This issue will increasingly come to face Apple as cheaper but still capable smartphone models such as the OnePlus 2 launch in Australia. Such smartphones provide almost all of the functionality that an iPhone would, and come with Google’s excellent Android platform, with its extremely strong third-party software library.
Apple may be passing on prices fairly to Australian consumers. But that still may not mean that Australians consumers are actually willing to pay those prices. I think most of us are willing to pay $1,500 for a new laptop every few years. But $1,500 for a smartphone? That’s a little beyond the pale. I think eventually Apple may need to revisit its famous profit margin for the iPhone. Because right now the competition is fierce — and I don’t know how long Apple can afford to keep its prices that high.
Image credit: Apple
The real interesting numbers will be how much of this price change will carriers absorb and how much will they pass on in their new plans? Because who buys new phones outright anyway?
On a more macro level, this is manifestation of the massive levels of wealth destruction that has occurred in the Australian economy over the last 12 months, and considering how well the iphone traditionally sells it will be interesting what this price rise will do to the measure of inflation
I’m one of those weirdos that buys new handsets outright, but only because I’m on a legacy plan as a result of being a part of Telstra’s testing pool years back. What I pay makes it worth it, still, several years on. We’re approaching the point where public plans are closer to the value I get, but not yet.
And so it begins. Pretty soon every single product sold in this country that’s been sourced from overseas will see a similar mark up. Anyone care to talk up the benefits of a low Australian dollar now? Given its recent rate of deterioration, in another 12 months these prices will seem downright cheap.
Apple has an edge? that, as always, is a matter of opinion and use case.
I’m just glad the iPad mini doesn’t come in pink – it’s pink not rose gold- that saved me the cost of upgrading my wifes pad.
While i’m personally going to upgrade to a 6S in the new year when my existing contract expires, I am annoyed that the base models are still only have 16GB of storage when this is clearly barely enough these days. Heck apple decided the iPad Pro needed 32GB as a minimum – there’s just no excuse for this imo!
To be honest buddy – I think these prices alone are worth A) jumping ship and B) the effort it’ll take to familiarize yourself with the interface of an Android device. Not to mention how much you’d actually save if the memory size actually bothers you that much. I mean look at the price jump between the 16gb and 128 gb models of the S and S Plus – $300. I bought a HTC one M8 outright a year or so back for $600au, and I used my old 32gb micro SD card to go with it. If I wanted to I could get a 128gb Micro SD Ultra for $95 on Ebay – and I would still be $800 ahead. Heck – there are older model Micro SD cards, 128gb, for as little as $20.
My point is bud – no matter how fancy the user thinks the interface and look may be of an Apple product… 50% of the cost is in the logo. Never before has this been so clear.
For those of us who’ve invested heavily in the iOS app ecosystem and get their phones on contracts it really isn’t that big a deal.
The new Samsung’s aren’t exactly cheap either. Having had HTC phones before I’ll never by another, support is worse than Samsung!
This isn’t just purely an Apple thing – I was having a quick look at pricing for the Samsung Galaxy Note 5 and it was up around the $1300 mark and the largest capacity was 64gb. So the drop in the Australian dollar is already having a significant affect on the prices we pay for technology. Having said that, I am going to really really want that iPad Pro with pencil/keyboard cause that looks amazing and I’m just gonna have to suck up the horrible pricing. And this is when I want to slap our government for saying how awesome it is for the economy that our dollar is crap…sigh…
This should be a GOOD thing for the apple sheep – they LOVE to throw good money away every year to keep up with the Jonses, and keep apple rolling in it. Now they can pat each other on the backs and salivate over paying $1300 to have the latest apple thing.
Really? That’s the best you could come up with to contribute to the comment thread? Good job.
Earlier this year I bought a Nokia 930 for $482, could have bought a spare and still cheaper than the iPhone 6s
I bought an unlocked Motorola Moto G from Dick Smiths for $270 in Feb this year. I’m done with paying big dollars for a heap of features I never end up using.
Nexus 9 – is that even getting much support?
nexus 6 is a nice phone but it’s also almost a year old and the camera was IIRC pretty lacklustre.
Also forgetting that most iphone upgrades happen on carrier contracts, not outright sales. Comparing the price of flagship Android phones with new 6S may work out on paper for people who have no investment in phones, but anyone on a 5S or older model is probably heavily invested in the app ecosystem Apple has. It’s not ‘just’ a $400 coverprice difference. And the newer Android phones are going to suffer similar price hikes. Even if a new Nexus 5 tries to be a cheap phone, it’s not going to look cheap in AUD compared to the original N5.
All that means is everyone’s plans will go up in price. I’m really happy I got an unlocked phone last time, paid a little more up front, but saved a ton over time…
Last I checked Telstra at least dont even lock iPhones on contracts anymore which is great for travelling.
I have pay as you go with Telstra, so same deal on the travelling (and I can skip paying for that month too :))
And let’s not forget that iPhones don’t become abandonware after 18 months or less so sure they aren’t “cheap” but even my daughter’s iPad 2 will get iOS 9 and it’s nearly 5 years old!
IOS device owners also get updates as soon as apple releases then, we don’t have to wait months for them.
I can recall having a HTC and waiting 15 months for the official upgrade from 2.3 to 4.0 and missing out on numerous security updates during the wait too!
Nah man, point out any of this and you’re just an Apple Fanboy.
Pricing will be a function of the dollar’s slide against the greenback.
The near price-parity was always going to be a short-term thing. Pricing is based on insulating from a degree of fluctuation, so I’m not surprised to see firmer prices.
Punters will still buy them up, though. Regardless of the price. That and a lot of people’s phone contracts are aligned with new product launches, so swapping to a new plan and handset tends to insulate the consumer from some of the bill-shock.
I won’t be getting the new iPhone S Plus, though. The changes aren’t really enough for me to replace my existing Plus.
Like others has stated, I dont think its fare to compare to the Nexus range. Google famously sells these phone with nearly zero margin, in fact if that sold more than a handful of them they would have to start charging more. Google sells these to keep a toe in the market.
When compared to the premium phones like the Galaxy range all of a sudden the price is about the same.
Also why should a phone cost lest that a laptop or a desktop?
I….what?
Because everything is smaller, lessor and expected to be upgraded sooner. Go run a business off your phone and see how far you get…
I think Paul’s point is that extreme miniaturization costs more.
Does really though? Look at the price difference between a 7″ tablet and a 6″ phone….pretty well identical features, and the tablet can be half the cost…
I think you just proved my point mate! :-)
Not so sure on that Derek, the (new) Nexus 5 with similar features (some arguably better) to a iPhone 6 is half the price too.
The only real difference is the “Apple Reality Field” :)
And given that Google/LG will still be making a profit on that at the price it is, no wonder Apple is the richest company in the world :)
You missed the point my friend, that 1″ smaller size means higher density levels of integration. You’ll prolly find the 5.5″ phones are thinner than three 7″ tablets too.
Ps by apple reality field i’ll assume you mean an average of 4 years of device support including instant updates across the entire range making the minor price premium worthwhile.
Btw, those cheap phones you refer to aren’t playing in the premium space, Samsung with its new S6 range is the only real comparison. The others are cheap plastic and not premium at all.
No, I know what your saying, but as with all things in life “Follow the money”.
Apple is the richest company in the world due to their profit margins. The devices they sell, return a bigger ROI than the devices other companies sell theirs at.
In mentioning the Nexus, I was pointing out that similar (or even identical) tech is sold at vastly less ROI than Apple expects.
Form over function, it’s the Apple way.
Mate you’re forgetting that only 3 android OEM’s actually make any money from selling phones and this is because they cannibalize each other on a race to the bottom just like the pc market did. Apple play by their own rules which is how they manage 30% margins.
http://techcrunch.com/2015/02/26/apple-eating-all-the-profits/#.pszq8g:vugu
At least you’re (almost) half right :)
http://www.smh.com.au/digital-life/mobiles/apples-iphone-6-profit-margin-at-least-69-per-cent-report-20140924-10ld37.html
Apple gross profit margin hovers around 40%. Not the crazy high 60-70% the tear down guys claim
http://ycharts.com/companies/AAPL/gross_profit_margin
That’s the companies gross profit margins, so that is across all devices and includes Apples “creative accounting”. It’s not the hardware’s gross profit margin.
Exactly, tear-down is component costs only and doesn’t include the significant R&D, Tooling, production or marketing costs.
Apple is just too much of a white elephant glamour to me. i recently found an old Nokia, one of those that falls and break the ground.
I’m will never have to buy a phone again http://www.gumtree.com.au/pages/pricechecker/
wow, no wonder Telco’s get away with charging $100 per month, with attitudes like that.
A phone is a very basic piece of technology, and a limited functions one at thet, due to its small sie its not a productivity tool, and should cost a LOT less than a laptop or a desktop.
Most phone manufacturers recognise this, although there are still a few getting away with their “premium prices” for no more than the “Budget features”. This is changing though, people are waking up to the fact that they don’t need to spend $1000 every year to keep Apple’s profits rolling in, and to keep up with the Jonses, but actually receive little to nothing for their money.
Nice to see Derek understood what I was saying. The Nexus is a loss leader, just like the Fire Phone. Its never intended to make money, just to get a foot in the door.
Once you compare the iPhone price to the HTC One or Samsung S6, the different is tiny.
“Because everything is smaller, lessor and expected to be upgraded sooner. Go run a business off your phone and see how far you get…”
Have you noticed that Laptops are smaller than a desktop, have poorer performance, cost more, hard to upgrade…
As to running your business of it… what does that have to do with cost?
And yet Kogan can sell good phones at even less than the Nexus, I doubt Ruslan is selling them as loss leaders. Apple is known to have a better than 69% profit margin on iPhones (it’s actually more than likely higher). Apple does that to not just make money, but to keep them expensive and desirable. Apple isn’t just a tech company, they are also one of the smartest marketing companies in the world.
If, as you contend, miniaturisation is what makes things expensive, then an Intel NUC would actually cost more than an iPhone considering it’s a full desktop PC packed into 115x111x48mm box, but they aren’t. The same applies to all the “smart” wearable’s around now days (some of which doesn’t even need to tether to a smartphone to be “smart” in it’s self).
Yeah your missing the point again.
The Nexus is a lose leader for Google. As is the Fire Phone. Of course the Reseller is not taking a loss, that would be stupid.
I am sure you can get “cheap” phones… but thats the point.
My whole argument is that comparing the iPhone, a premium device, to a Nexus a lose leader is not a fair comparison. It would be like comparing it to the cheap Android phones you can get from Aldi.
Once you compare the pricing to other premium phones, the S6 and HTC One, then all of a sudden Apple doesn’t look so bad.
I won’t even debate your argument of Intel NUC as it ridiculous. So I will say it again…
Have you noticed that Laptops are smaller than a desktop, have poorer performance, cost more, hard to upgrade…
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