Is Vista’s Australian pricing a rip-off?

You could save between $54 and $217 by mail-ordering Vista from the US rather than buying it here.

I reached this depressing conclusion by analysing Vista’s pricing in detail first comparing both the straight US dollar “estimated retail price” converted to Australian dollars as well as an adjusted price factoring in the profit margin Microsoft Australia previously applied to XP’s Australian pricing.

A few back-of-napkin calculations showed that while XP was 1.66 times more expensive in Australia than in the US Vista is up to a whopping 1.91 times more expensive depending on the version.

So what’s in it for Aussies to buy it locally other than supporting our industry? And why is Australian Vista pricing jacked up so much compared to XP? I asked Microsoft Australia’s Windows boss Jeff Putt.

After weeks of deliberation Putt responded on behalf of Microsoft that the Vista RRP was a guide for retailers only; that it was more expensive to do business in Australia and the Vista costs had been calculated on the same basis as XP; that the base price for Vista is the same worldwide once exchange rates are applied and that the US Estimated Retail Price (ERP) doesn’t include tax while the Australian one does.

The last point is more than fair – but doesn’t explain away the fact that Australians can order a copy of Vista from the States without paying US sales tax while also taking advantage of the Australian government’s policy of GST-free personal importation of products below $1000.

Putt also argued that “There are many benefits to buying from local retailers including local product exchange local market warranty conditions local returns and added-value services.”

We asked what these “value added services” for Australians were and Putt said he meant for example a computer shop installing the software for customers.

Cost to mail order Vista from the US

US ERP

P&H

Converted to $AUD

Saving over Australian RRP

Business Full

$299

$12

$404

$161

Business Upg

$199

$12

$274

$105

Home Premium Full

$239

$12

$326

$129

Home Premium Upg

$159

$12

$222

$77

Home Basic Full

$199

$12

$274

$111

Home Basic Full Upg

$99.95

$12

$146

$54

Ultimate Full

$399

$12

$534

$217

Ultimate Full Upg

$259

$12

$352

$143

Using $1.30 as the US-AUD exchange rate. Postage and handling cost sourced from emsoftwaredeal.com.