Globalization Has Some Work Left to Do

Tom's Hardware finds that computer hardware prices vary enormously around the world. Globalization — and even the European single market — still has a long way to go:

Meanwhile, the price differences between different PC products are remarkable. Basic consumer electronics accessories such as a 2-GB SD memory card vary in price around the world by up to 100%, while prices for premium PC components vary by 10-30%. Cost for a Core 2 Duo E6850 processor or a GeForce 8800 GTS graphics card was very much balanced, while the Coolermaster power supply or the Zalman CPU cooler showed large pricing differences. We selected products that are available almost everywhere, and we took the average price of the four cheapest etailers to get a solid number.

We found that France is rather expensive, especially if compared to Germany, which is next door. The United States is at the other end of the pricing spectrum, as most products are less expensive there.

One reason may be that consumer-level arbitrage isn't easy:

It does not make sense to order hardware in a foreign country, or to buy large amounts of hardware when you travel. One the one hand, shipping cost will eat up all cost advantages. On the other hand, you'll have to pay custom duties or an import turnover tax for many products. The only exception is the purchase of inexpensive products, as consumers in different countries can often buy goods abroad that remain below a certain price level without having to pay duty charges.

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One Response to Globalization Has Some Work Left to Do

  1. PHB says:

    From the article: “The United Kingdom also has its Currys, Dixons or PC World, but the typical shopping behavior there is different from that of Germany and is more U.S.-like as people just often go to these outlets to spend money instead of to heavily scrutinize price differences”

    Hardly a suprise, all three stores are owned by the same parent. Dixons was a big contributor to Tory party coffers and was allowed to buy its rival Currys and corner the market in UK sales of brown goods. PC World is another Dixons brand. There is no point in comparison shopping as thanks to Thatcher there is no competion.

    If you don’t buy your computer through Dixons you probably buy it mail order from Dell or Gateway. As in the US the prices of consumables and accessories is much better in the office supply sotres than the computer stores. It was no suprise to me that CompUSA went under, Staples has a better range of computer accessories and software. I tried to buy Visual Studio at CompUSA without success, Stapes and OfficeMax both carried it.

    It is easy to see why the price fluctuations in a $1000 graphics card get flattened out but not in a $50 power supply. The arbitrage is worth it on the one but not on the other.

    The difference in prices is much less today than it was in the 80s when an Apple Mac cost 50% to 100% more in Europe. That is one reason why many Europeans take such a dim view of Apple.

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