Software and hardware products in Australia sell for a median 50 percent more than their U.S. equivalents, according to a 2012 survey of 186 songs, games, programs and computers by Choice, a not-for-profit consumer advocacy group. Companies could face restrictions on their ability to set prices in Australia under measures being considered by lawmakers.
“There’s been price discrimination against Australian consumers,” said Matthew Rimmer, a professor at Australian National University in Canberra, who specializes in copyright law. “If the distribution is digital, why are the prices so much higher?”
Rihanna’s album costs A$22.99 ($23.98) in the Australian iTunes store, compared with the $15.99 that fans in the U.S. pay. Bruno Mars’s “Unorthodox Jukebox,” in the Top 10 of both nation’s charts, costs 42 percent more.
Downloads of Microsoft’s Office Professional 2013 software package cost A$599 in Australia, about 50 percent above the $399.99 charged in the company’s U.S. Web store.
“We would love to see lower prices for content in the Australian store,” Tony King, managing director of Apple’s Australia unit, said at the committee hearing in the capital Canberra today. “We would urge the committee to talk to those folks who own the content.”
The biggest difference in prices for music and films was due to the wholesale price set by music labels and film and television studios, he said.
Customers “will vote with their wallets” and buy alternative products if prices are too high, Pip Marlow, managing director of Microsoft’s Australia division, told the committee.
Different packaging distinguished products sold in Australia from those sold elsewhere, Adobe’s Australian managing director Paul Robson said.
“I’d consider a box that has different writing on it to be materially different,” he said.
Sales taxes, different labor and rental costs, marketing spending and the decisions of third-party resellers can all cause Australian prices to be higher, Redmond, Washington-based Microsoft said in its filing to the committee. Even download sites incur costs for maintenance and support, the company said.
The strength of the Australian dollar has increased the contrast between local and international prices for software, music and entertainment.
The currency, which didn’t climb above parity with the U.S. dollar from 1982 through 2009, has risen more than 50 percent over the past four years and hasn’t been worth less than a dollar in eight months.
The Windows Vista Home Premium software package cost A$455 in mid-2008, 75 percent more than the $240 U.S. price at the prevailing exchange rate, Choice said in its submission. The updated Windows 7 Home Premium package cost A$299 four years later, still 47 percent more than the $199 charged to U.S. users.
Consumers expect prices to be more stable than they would be if they tracked every shift in the foreign exchange market, San Jose, California-based Adobe said in a submission to the inquiry last year.
Only a week after Apple SVP Phil Schiller called attention to security issues affecting Google's Android operating system, Apple has updated its OS X operating system to make it more secure.
Apple's OS X Mountain Lion v10.8.3 Update, released on Thursday through the company's Software Update mechanism and as a download from Apple's website, includes a variety of changes to improve stability and compatibility as well as security.
But the security fixes are the most necessary changes. The update addresses 21 vulnerabilities, 11 of which could be exploited to allow remote code execution.
Last month, Apple released an update that patched 30 Java flaws in the version of Java 6 that the company maintains, shortly after the company reportedly acknowledged that a zero-day Java flaw had led to the compromise of Mac OS X computers at Apple and other companies.
Java doesn't retain its starring role in Thursday's update, but it does play a part. In a blog post, Sophos security researcher Paul Ducklin characterized CVE-2013-0967 as the most interesting bug fix. Apple warns that the flaw (in OS X's Core Types component) could allow a malicious website to launch a Java Web Start application even if the Java plug-in has been disabled.
"It'll be something of a surprise for anyone who was relying on Apple's newfound strictness against Java to find that turning Java off in your browser didn't necessarily have the desired effect," Ducklin observed.
Quit bashing Samsung. Without them, apple would be nothing.
The iPhone maker has been rumored to be diversifying its supply chain away from Samsung in order to reduce its dependence on a company that has become its fiercest rival in the mobile device space. Intel, with whom Apple already has a deal in place for its MacBook chips and whose manufacturing technology is widely considered as the best in the world, will be a strategic fit considering that they do not compete in the same space currently. Having missed the mobile business as its x86-based mobile chipsets fail to gain much traction in the market, Intel will be well served if it manages to leverage its manufacturing prowess to become a major player in the growing foundries business. Meanwhile, Apple will look to bolster its margins by fostering greater competition in its supply chain.
27 bids 1525.
The company behind the original “Goophone,” a Chinese iPhone 5 knockoff powered by Android, has beaten Apple (AAPL) to the punch by launching an updated “i5S” version of its smartphone. The handset uses a design that is nearly identical to Apple’s iPhone 5 and it runs a highly customized version of Android 4.1.2 Jelly Bean that has been modified to look and act like iOS. The handset features a 4-inch “oneglass” screen with 854 x 480-pixel resolution, a 1GHz dual-core MediaTek processor, 512MB of RAM and a 5-megapixel camera, and it costs just $150 in China. A hands-on video of the Goophone i5S follows below.
Look through the footnotes in American International Group Inc. (AIG)’s latest annual report, and you will see a long section analyzing the company’s ability to use past losses to offset future income-tax obligations.
The gist: AIG’s executives have gazed into their crystal ball and concluded that the company’s prospects don’t look good. That dim outlook may help explain why the U.S. Treasury Department seems so anxious to begin reducing its 92 percent stake in the bailed-out insurance company, after a 36 percent drop in AIG’s stock price this year.
The disclosures to watch here have to do with an item known as deferred-tax assets. Typically these consist of tax- deductible losses and expenses carried forward from prior periods. Companies can use these to lower future tax bills.
Under generally accepted accounting principles, such carry- forwards are valuable only to companies that are profitable and paying income taxes. If a company doesn’t expect to fully use these assets, it’s required to record what’s called a valuation allowance on its balance sheet to reduce their carrying amount.
In AIG’s case, the company has set up a full valuation allowance against its deferred-tax assets. AIG said it did so based on management’s conclusion that the assets “more likely than not” won’t be used. Forward-looking indicators don’t get much more bearish than this.
Here are the numbers: AIG said it had net deferred-tax assets of $24.5 billion as of Dec. 31, before factoring in the allowance. With the allowance, which was $25.8 billion, AIG finished last year with a $1.3 billion net deferred-tax liability -- in effect, a future tax obligation.
In other words, the allowance more than wiped out the net assets. This wasn’t the case a year earlier. At the end of 2009, AIG showed net deferred-tax assets of $5.9 billion, including the allowance. AIG hasn’t disclosed what its tax assets were as of March 31, and a company spokesman, Mark Herr, wouldn’t say.
The footnotes also show a breakdown of the different types of AIG’s carry-forwards on a tax-return basis. For example, as of Dec. 31, AIG said it had $11.3 billion of net operating loss carry-forwards that expire from 2028 to 2030. It would need about $32.3 billion of taxable income from its operations over 20 years to fully reap those benefits, assuming a 35 percent tax rate. AIG concluded it likely won’t realize any of them.
“The implication is there are significant questions about future profitability,” says Charles Mulford, an accounting professor at Georgia Institute of Technology in Atlanta, who reviewed AIG’s disclosures at my request. “It should give investors pause.”