Juha Saarinen: Do we still pay the 'NZ Tech Tax'?

Photo / iStock

One problem that I have when evaluating new devices is the pricing. That is, if I look at what things cost overseas, in the US especially, New Zealand pricing is often sky high in comparison.

I've mentioned the "NZ Tech Tax" on numerous occasions in the past. It invariably draws out a large number of defenders from companies and public relations bureaux who present justifications such as freight charges, small market size, warranty and support costs, taxes and levies, exchange rates, you name it.

I also hear from readers who look at how much devices like the Nexus 6P cost elsewhere and gasp when they compare the pricing to what you have to pay in NZ.

Some of the imposts adding to the price of goods are obviously fair enough.

Nevertheless, it may seem odd that in 2015, with all the efficiencies IT brings in, cheaper freight routes and talk about tariff slashing with free trade agreement that we pay so much on top compared to some other countries.

I reviewed the Google Nexus 6P this week which is a nice device that lots of people, developers and end-users, are interested in.

One reason for that is that the Nexus 6P is reasonably priced - in the United States at least.

Across the Pacific, you pay NZ$760, $835 and $987 approximately for the 32GB, 64GB and 128GB model respectively at today's exchange rates.

Google pricing for the Nexus 6P is NZ$1,099, NZ$1,199 and NZ$1,349 for the abovementioned models.

That's quite bit of difference at first glance, but the US pricing should include sales tax, which adds anywhere from one to over ten per cent to cost of the Nexus 6P depending on the State the device is purchased in. Likewise, if you take off 15 percent for NZ goods and services tax, the difference in pricing narrows.

Without knowing the wholesale price for the devices it's hard to make a fair comparison of retail prices; it would be interesting to know what Google's margin is on the Nexus 6P.

The fluctuating NZ$ exchange rate makes it a challenge too - this comparison at Android Police makes it look like Kiwis pay 41, 40 and 33 per cent more for the above devices, but it's from September 30 this year, when the NZ dollar didn't buy the same amount of US money it does today.

Make of that what you will, and perhaps keep an eye on the NZ$ and US$ exchange rate next time you go overseas and bring some extra cash, in case.

Speaking of money, Dominic Toon wrote to warn that some of the good deals on Nexus and other devices that you see advertised are simply too good to be true.

Dominic bought an Nexus 5 from an Auckland reseller for what seemed like a good price, NZ$966.

However, the shop in question added a $30 freight charge. Worse yet, the Nexus 5 was not the international model, something Dominic didn't note until he went overseas with the device which wouldn't work in the country that he visited. A NZ-specific Nexus 5 did however.

He also received a non-NZ power pack, with an adaptor, and then another under-powered charger.

Beware, in other words, and check beforehand what it is that you're buying.

It's good to see that the local internet is getting better connected with more providers being able to swap traffic with each other, and content delivery networks (the antidotes to "buffering..."), much cheaper than in the past.

One reason for this is the appearance of a new player in the market, the not-for-profit Aussie group of independent peering exchanges.

A peering exchange are one or more buildings, or just network switches, where providers connect to each other so that they can send and receive data easier, faster and for less money than building separate circuits between networks.

They also make the NZ internet more robust and resilient, as there are more routes for data available for providers to select from, in case something goes wrong, or one of the big players decides to hold its customer base hostage and demand money for other operators to access their networks.

Auckland is the centre of the NZ internet, with most of the traffic exchanged here. Until now, the Auckland Peering Exchange (APE) has handled most of it. I've heard complaints from providers that being the only game in town, APE has charged quite high pricing for the faciltiy.

However, the new Auckland Internet Exchange (AKL-IX) is off to a flying start with thirty providers joining it, providing welcome competition for APE.

Here are two traffic recent traffic charts, first one for APE, second one for AKL-IX:

The "G" stands for gigabits per second, and it looks like the new kid on the block is handling more traffic than APE in fact. Ain't competition grand?

Even though the average 7.11Gbps for AKL-IX looks large, it's tiny compared to the New South Wales internet exchange (also operated as a not-for-profit) facility:

IX-Australia NSW is one of three peering exchanges in the state. There are also several more exchanges in other states in Australia, which gives you an inkling as to how big their internet is, so to speak.