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Overheads, warranties behind New Zealand Windows PCs price p
HP New Zealand managing director Grant Hopkins says higher overheads are behind the premium we pay when buying Windows PCs.
While New Zealanders get the same hardware as US or UK customers, we get better warranties.
He says HP’s US
customers get a one-year warranty. That’s it. In New
Zealand the Consumer Guarantees Act applies when
non-business people buy computers. [1]
Acceptable quality
According to the CGA, goods must be of acceptable quality. Cutting through the legal language, this means consumers can expect a PC to last more than just one year.
Exactly how long it should last isn’t specified in the Act. But most of us have a good idea of what is reasonable or acceptable.
In practice if a computer bought in New Zealand stops working two [2] years after you buy it, you have a right to a repair, replacement or refund. Retailers can't argue about any of this. Australian consumer laws are similar. [3]
Retailers are responsible for
the goods they sell. That’s where you go if there are
problems.
Carrying the can
Yet computer brands like HP know they won’t get anywhere if they let their retailers carry the can for poor quality products. They end up running in-house or outsourced support operations to deal with returned products and looking after their retailers and distributors.
While a brand like HP only has to worry about computers for one year in the US, in New Zealand a computer stays on the books as a potential liability two years after a customer buys it.
PC support
costs are not directly proportional to the number of
computers sold. In the US HP’s support operation gets
economies of scale that aren’t possible in New
Zealand. There are other economies of scale in a big
country.
A big margin
Whether these costs add up to the full 60 percent premium New Zealanders pay over the American price is debatable. Let us know what you think in the comments.
Windows PCs often sell for more in New
Zealand than elsewhere. The price difference dramatic.
Apple doesn't mark up its hardware as much as the Windows PC
makers.
Mind the gap
It means the gap between Apple and Windows PC prices is lower in New Zealand than in the UK.
In the linked story The Guardian’s Jack Schofield advises a reader about buying a work-from-home PC.
He says the HP Stream 11 is a low-cost option. Although it’s not recommended as a work machine, the Stream 11 is there to show how low prices can go. In the UK the HP Stream 11 costs £130.
Exchange rates fluctuate.
More so in the last few days. In round numbers the pound is
worth two New Zealand dollars. So the Stream 11 UK price in
New Zealand dollars is about $260.
Twice the UK price
The same model sells in stores here for $500. That’s almost double the UK price.
In December I compared the New Zealand price of the Spectre X2 to the Microsoft Surface Pro 4. At the time HP’s computer cost 60 percent more in New Zealand than in the US. That’s after taking GST into account.
It’s not just HP. You can
compare US or UK prices for other popular Windows PC brands
with what you pay here. Most brands charge New Zealand
customers a premium. Sometimes a hefty premium.
Anger management
Readers often get angry about higher New Zealand hardware prices. That’s understandable.
One idea
that comes up often when discussing the subject is buying
PCs direct from the USA. There’s nothing to stop you from
doing so, but there are pitfalls:
- You are not entitled to local support. While some online retailers are responsive, that’s not common.
- You buy on US warranty terms: 12 months. If you buy a decent model from a good quality brand that won’t be a problem.
- Customs adds GST when the computer lands in New Zealand. Remember that is an extra 15 percent on the US price. It may also slow delivery.
- It’s rare these days, but in the past people buying direct from the US have had odd, frustrating incompatibilities.
Hopkins has a point. You get something back in return for higher local prices. You may see the longer warranty as worth the cost.
It’s
still your choice what to do. A toss-up depending on your
tastes, needs and your ability to be your own service
department. You can pay the local premium for more consumer
rights or bank the savings.
- This only applies to computers sold to consumers. PCs purchased for business are not covered by the Consumer Guarantees Act.
- Two years isn’t written down anywhere. Something that gets hammered out in the field might be of acceptable quality and still die after a year. You might have a strong case if other devices die months after their second birthday.
- Australia’s consumer laws are similar. In most other countries you’ll have a harder time getting satisfaction if something goes wrong after 12 months.
This story was first posted at billbennett.co.nz
Bill Bennett
Freelance journalist.
Auckland-based Bill Bennett writes technology and business stories that are directly relevant to New Zealand readers.
His emphasis is on telecommunications, but he also covers other aspects of technology and business. You can find his features in the New Zealand Herald and hear him regularly on RNZ Nine to Noon and the NZ Tech Podcast.
Bennett's The Download Weekly newsletter is published every Friday. You can sign up for it here.
If you want to support his work, you can make a donation to his PressPatron account.
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