What price will the iPad be when it is released in Australia

I'm sometimes asked the question, 'What price will the iPad be when it is released in Australia?' and really, only Apple knows the answer at this stage. The Australian dollar is strong at the moment and if the Australian dollar holds, most of us would think the price difference due to the dollar shouldn't make that much difference.

Using Google to do an exchange rate calculation (as shown on the Fun With Search page), $1USD costs us around $1.082AUD, or around 8% more. I also allow another 6% as I've found if you purchase something from overseas on your credit card, there is an exchange rate difference of 6% that does not appear anywhere. If you want to test that buy something on the internet in USD and then get an immediate refund. You'll find a 5-6% difference. I've been told by banks before this is due to exchange rate variations, but I explained there is no way the exchange rate varies by that amount in a matter of less than a minute. I suspect the difference is due to the buy and sell rates and the credit not being applied correctly. But I digress.

Now another factor that needs to be considered is the price often seen by us on American sites from Australia does not include sales tax. In America I've found sales tax is added to the price at the cash register. I've been caught a few times thinking what a great price only to later have the difference chipped away with the sales tax being added. What that means is we also need to add GST to the price when we buy it here.

Recently this article appeared in PCWorld about the ability to buy unsubsidised iPhones, but the phones are still locked to AT&T. This gives us a good idea as to the outright purchase price of an iPhone in the States.

The iPhone 3G 8GB model sells for a list price of $499, while the iPhone 3GS 16GB and 32GB models sell for $599 and $699, respectively.

The price of these phones when purchased outright from Apple's Australian site are: $719, $879 and $1,040 respectively.

That means the price in Australia for the phones is 144%, 146% and 148% respectively of the price in the States. There's also an interesting trend. As the price goes up $100USD, the percentage difference goes up 2%. It is almost as if a higher percentage is being charged because those spending more are willing to pay more. I'll use the same approach in the calculations below.

The following are the iPad prices from the Apple US online store

Wi-Fi
16GB $499USD
32GB $599USD
64GB $699USD


Wi-Fi + 3G
16GB $629USD
32GB $729USD
64GB $829USD


The good thing is we don't have to convert the Wi-Fi model in terms of prices because each of the iPhone models gives us an exact match. With the 3G version I'll use the figures of 146%, 148% and 150% respectively.

Wi-Fi
16GB $719AUD
32GB $879AUD
64GB $1,040AUD


Wi-Fi + 3G
16GB $919AUD
32GB $1,079AUD
64GB $1,249AUD


Now if should be noted this does not mean prices in Australia are inflated by 144% or more. I went through the earlier discussion about price differences based on exchange rates because people often ignore the exchange when buying from overseas. Based on the exchange rate, costs of exchanging currency, and GST, we could expect the price in Australia to be 126% of the US price.

Using a figure of 126% the Wi-Fi version of the iPad we could expect a price of $629 in Australia for the entry level model. If the price of the Wi-Fi 16GB model ends up to be $719, then we are paying a premium on Australia of about 14%. That doesn't look quite so bad. Now if you can buy one duty free on a trip leaving Australia and save the GST you could save around $65. If you are a smoker, drinker who loves Apple products, a trip to Bali and the duty saving could go a long way towards paying off the iPad. Don't be surprised if you see a lot of iPads turning up this winter in Bali.

All of the above is conjecture and is not based on any inside knowledge of what Apple is or isn't doing. I do hope Apple decides to cut prices to the bone when they release the iPad to Australia. The rest of the players in the market seem to be months behind and that could give Apple the momentum they need to stay ahead of the pack.

I should state I'm not an obsessed Apple fan. I own an iPhone which I use as a computer. I make no phone calls using the iPhone. To me it had the best set of features that I wanted for the price. For me the reason it isn't used for calls is I keep my mobile costs very low by cherry picking the plans available from the Telcos. No single plan for me is as cost effective or provides the data coverage I require. I do hope that changes in the future so I can again carry a single mobile phone.

I hope you find this information useful.

- Kelvin Eldridge

UPDATE: 8 May 2010

I was very surprised to see Apple has now released the Australian pricing for the iPad. Based on my calculation it is close to parity with US prices. Full credit to Apple for their aggressive pricing. You can read more on here.