Lenovo defends 60 percent Aussie 'tax'

By Allie Coyne on Aug 27, 2012 3:48 PM
Filed under Mobility

Local buyers hit with big mark up

Lenovo has defended its decision to hit local buyers with an almost 60 percent mark up on its latest ultrabook, the Carbon X1.

The business ultrabook launched last week locally, with an RRP of $A1999 - $A750 more than in the US.

The X1 was launched in the US in early August for $US1299 ($A1244). Locally it sells through Lenovo’s web portal as well as distributors Synnex, Ingram Micro and Dicker Data.

Lenovo director of products and solutions David Heyworth told CRN the price difference was due to a number of factors including warranty, margins, channel and support.

“That’s the case for everything, what you pay for an iTunes song in Australia versus what you pay in the US,” he said. “There’s also some difference between the North American market and the Australian market in reference to warranty and support, and the size of the market.”

The ultrabook retails on Lenovo’s UK online store from £1019 ($A1549) and in Canada for $1299 ($A1261). It is yet to launch in New Zealand.

Heyworth declined to provide details on specific issues affecting local price mark up but said the channel partner was responsible for the ultimate price.

“The RRP is probably a little bit higher but the street price often differs based on what the channel partners put on it to market. It’s also built on local services, local warranty, local support,” he said. “There’s a large geography, and warranty needs to be covered across that, as well as the employment of Australians in Australia.”

When questioned on why Lenovo’s PC rivals were able to sell products locally for a smaller mark-up, Heyworth said Lenovo didn’t compromise on value. 

“We have high standards and we wouldn’t compromise on service and support that we deliver through our partners, that’s always been important. That’s where we see a lot of growth for Lenovo, being able to back up our products 100 percent.”

Samsung is one example of a PC vendor limiting its local mark-up. When it launched its 13.3in Series 9 consumer ultrabook in late April its local price was set at $1599 compared to $US1400 (A$1348).

Heyworth said there was no hard and fast rule around pricing locally. He cited the difference in channel structure between the US and Australia as one contributing factor but declined to elaborate.

“It’s about delivering products to market that are leading edge products and technology, and being able to back them up 100 percent locally, from service, support and employing Australians to be able to do that.”

The debate around alleged price discrepancies in Australia compared to overseas has ignited fierce debate and sparked a Government investigation.

The Federal Government in May announced a parliamentary inquiry into whether price differences exist with hardware and software sold locally compared to the US, UK and Asia Pacific.

The investigation came as a result of a lengthy campaign by Labor backbencher Ed Husic, who late last year attacked IT vendors for ripping off Australian customers. 

The inquiry has so far received 88 submissions from customers, partners and vendors, including the likes of Apple and Microsoft - the former having been granted a private closed-door hearing with politicians.

Heyworth would not comment as to whether Lenovo intended to make a submission to the inquiry.

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