Are Grey Market Phones Really A Risky Buy?

Samsung launches its plus-size-with-stylus Note phone in Australia this week. If you buy the Android phone outright through a local Samsung-endorsed supplier, you'll pay $899, but going online you can buy it for $559. So why on earth would you not do that?

The question of why the price was so high was put to Samsung telecommunications VP Tyler McGee at the Note launch event yesterday. His response:

At the end of the day it's due to the fact the product is optimised for the market here.

However, as Gizmodo editor Alex quickly pointed out to him, the grey import versions do support the frequencies used locally, so optimisation doesn't seem particularly relevant. McGee's comment? "Buyer beware. Be sure that what is claimed on a website is accurate."

As far as that goes, consumer law is your friend. If you purchase from a locally-based supplier such as Mobicity (which has the phone for $699) or Kogan (which has an even better deal at $559), then you're entitled to a refund if the phone doesn't match the description on the site you purchase from. It's always a good idea to check out any supplier before spending money with them, but it's ludicrous to suggest that you should pay $200 extra just because Samsung decides that's a reasonable price for Australians.


Comments

    It's the standard "Screw you because we can" tax that we always get on technology in Australia.

    Why else are we still paying 110 bucks for new release games.

      I too am tired of this tax

      Yea, Australians get screwed. At the current exchange rate we should be getting everything at near US prices plus a few import taxes. Not a 20%+ increase in price. It's ludicrous.

      Tried buying from Harvey Norman lately? Almost all their new release games are $78 and I haven't found a new release in months that wasn't. And that's the local versions/instore, not the imports they've been getting into lately.

        Being that you can pick up most games for $50 in the US $78 is still a ripoff. One particularly irritating aspect of the Australian tax is companies (EA is a prime example) charge nearly double for digital downloads (Steam and Origin).

    Except of course for the fact it's illegal to "import" non compliant phones (without an A-Tick) into Australia. So if you go down the kogan route - where kogan claims that "you" are the importer of the phone not them, you're technically breaking the law.

    While I do disagree with the rules in some ways (tourists come here all the time with overseas model phones etc), It's not like the A-Tick process is free.

      Blake, while that might be technically correct I think it is just an example of legislation that doesn't reflect reality. I'd be amazed if anyone was ever pulled up for breaking this particular 'law' (can you imagine the media circus?)

    Absolutely nothing wrong with buying grey import phones. If you want to play it safe, buy from one of the larger Aus. sellers like Kogan etc for ease of warranty. Otherwise, there are plenty of highly rated ebay sellers that you can buy from too.

    More companies need to respond to this 'situation' like Nikon have. JB Hifi were selling grey import Nikon items, but Nikon Australia decided to come to the party and offer the same pricing for Aus. delivered Nikon products that the grey imports were going for. So now if you buy Nikon from JB Hifi you get the official Nikon warranty etc, but at grey import prices.

    If Nikon Australia can do it, why can't other companies? And don't try and tell me its about 'market optimisation'

      agreed I bought my galaxy s2 from Kogan. no dramas whatsoever, and the price was right too!

    One of the major issues Australia has is wages and cost to do any thing compared to other countries vs volume... The cost to supply, support, service, certify and warrant a phone locally is considerably higher than in Asia and other countries, the volumes Australia does is also much lower so price per item has to be higher no?

    I agree with most prices are too high and it would be great to be prices like other countries have however buying online is only hurting our local sales, staff and countries future... For all online shoppers from overseas (including my self) in 50 years time when nothing is made in Australia. many businesses have closed and you're out of a job don't cry about it you are causing your own doom. Globalization does not and can't work in a country like Australia our living standard are much better than other places but you pay for it! That's just my 2cents worth...

      Jonathan, nothing is ALREADY made in Australia. What you are suggesting is that Australians happily pay 60% more for anything because.. what, it's sold by an "Australian" retailer? The product is still made overseas. What you are suggesting is protectionism - something Australia did away with decades ago (unless you're in the automotive industry).

      Perhaps when certain Australian retailers wake up and realise that the provision of excellent customer service should be their goal, rather than whining about customers, such as myself, sick of paying top dollar for rubbish service, taking their business elsewhere.

        Hi Cammo, I’m just saying it how it is, and yes Australia still does manufacture, sure they might not do allot of phones (that I know of any way) but I’m talking generally. Also one thing you avoided is the cost of staff in Australia (which there is no getting around yet along the ridiculous rent prices for shops)... If you don’t belve me I suggest you try and rent a small shop in your local shopping centre and see how much product you need to sell to just pay for the rent yet along staff and other running costs before even drawing a wage for yourself. The local suppliers also need to run service centres for support and warranty which also costs allot more than overseas...

        All I’m saying is there is allot more in it than just saying in the Asia I can get it for this why can’t I do the same in Australia... (In this example Asia sells a fair bit more product than Australia does, also this helps them to reduce there already much lower service costs, staffing costs, rent costs..etc..etc..) If you are a reseller or distributor in Australia you will know the prices you buy electronics for from suppliers/manufacturers is higher (eg, buying the Samsung Galaxy Note from Samsung Australia will cost you more than you can source it overseas, this does not help and is the first line of issues then retails/resellers have the added costs mentioned above that they don’t have overease)... Also when buying overseas you are getting a 10% discount due to avoiding GST again which is not right for the retailers and I can understand their frustration (but this is great for us consumers as it gets us lower prices but long term if everyone shops online you think it will be good?)

        All I’m saying it long term it’s not sustainable and we are going to end up doing damage to our country and our self as there will be no jobs in retail but more and more online shops were service will become worse off as it’s so easy to start a new website or dismiss issues via e-mail or when you can’t speak to someone..etc..

        As I said above I’m caught in the same dilemma as you, I purchase online myself and agree the price difference locally is way to much but I can also understand the other side of things as well, it’s hard to compare local cost of product to overseas were they don’t have the same overheads...

          i agree with your fence sitting point of view

          the real problem started long time ago with the death of manufacturing in Australia...death of retail is only an inevitable reaction to this.

          long term...employment will rise, customer service will go down the drain, retail shop vacancy will go up but hell if i can save 20 bucks now instead i will damn it!!

          Sorry to be a nazi, Jonathan, but some things were getting to me:

          - It's "a lot" not "allot"
          - The phrase is "let alone" not "yet along"

            Get a life!

            Did I say that correctly?

    Grey market is fine, but make sure you buy from an Australian seller rather than directly importing it yourself. I recently bought a Galaxy Nexus from Handtec in the UK, which has since developed a defect. Sending this damned thing to the other side of the world for warranty repair or replacement is a royal pain in the arse.

      haha a "royal pain in the arse" because it was from the UK right?

      I see what you did there :P

        Especially thanks to Aus Post's stupid "no Li-Ion" batteries rule. Sure, I'll just send it by road to the UK or courier it for an exorbitant price!

        Umm, it's spelled "arse" in Australia too. He wasn't being clever, he was just being Australian.

          I think it may have been the "Royal" more than the "Arse".

    I bought my Galaxy Note from Kogan early this year and am loving it. Big phone but it is working as small tablet/media player for the majority of the time. It would depend on how you use it.

    Sorry, I got distracted I like my new phone as my last was the Omnia i900.....

    I went to Kogan based on price and with decent (if not full) knowlege of the risks. I received my phone within 4-5 business days as described and I have not had an issue.
    While using TPGs 15 dollar a month plan I can save enough without losing services to justify the initial expense. A flashy phone is a luxury item, but this way I can justify it to myself :P

    I bought an HTC Desire Z from Clove UK about a year and a half ago and have had NO issues at all. It worked perfectly on Vodafone (yes.. whatever) and updated itself regularly until I rooted it :)

    At the time no one knew if we were getting the desire z in Australia and I didn't want to sit there and wait.

    Now I'm thinking of buying a Galaxy Note or an HTC One as grey import (contract's up and I'm on $25/mo and doing great) but I really want to see the handsets in person so I can decide if the size is an issue for me or not.

    I say that as long as you're aware of the downsides and have a spare phone in case you have to send it overseas for repairs, then, go for it.

      Deb, i too had the Desire Z, and what a beautiful phone...it felt great in the hands, and a pure pleasure to use...my next phone was the HTC Sensation so my screen jumped from 3.7" to 4.3" and i too was worried that it would be too big...but you do get used to it rather quickly, especially with the added bonus of being able to see the content better and clearer on a larger screen

      ps...the Galaxy Note is 5", the same size as the older model Sony ereaders...see if you can find someone who has one to try to compare the screen size to a handset

    i've imported all my mobile handsets for at least the last 6 years, and 2 tablets recently...the price saving is justification enough for me...if something breaks it's going to suck regardless, at least this way i paid less for it to begin with...i have easily saved $1,000 over all these devices...add to that, no 'contract' with a telco is required so i can, and do, frequently shop around for the best call+data sim cards available...the savings just keep adding up

    Only issue i have ever had with a grey import was that the rom for the region it came from was Muslim targeted with some random praying app that went off like every 15 minutes. 1 hour later i had it rooted and all good :)

    "product is optimised for the market here" I don't need the bloatware thank you!

    Grey import sales will reach a point where the local suppliers will have to make the profit/loss decision from the supplier and will either abandon them altogether or will join the grey importers list.
    The only way the current market will end is with the supplier having to realise an international price.
    Good news for us as the innovation is not based around us.

    +1 this is exactly what it is 99% of the time... any of the other comments on here about high Australian wages are so far from accurate one could go as far as saying you have no idea what your talking about.

    I recently bought my first outright phone - an HTC Sensation - from Mobicity online.

    I seriously considered grey imports but with how many problems phones have, I thought it was too risky to buy from overseas. In Aus, so long as you buy from a local seller (and not via auction) you get full Consumer Warranties - which basically mean a free extended warranty if you whinge enough.

    Let me explain - the Consumer Warranties provide a product must meet its description and also things like it being of "mechantable quality" and acceptable quality for its particular use. This is based on market and consumer perspective. So, for a phone, I'd say most people think it should last at least 1.5 years. Therefore if it dies before then, it's not considered to be of acceptable quality.

    Just a question as I'm intending on buying a phone overseas. For an Android phone, where does the software update come from? The manufacturer itself?

    Kogan have the Samsung g note for $489 with full 12 months warranty. Hard to beat that

    I bought an unlocked Samsung Galaxy Note from DW International in March this year. When I got it, it was in Bosnian and I had to firstly figure out how to change the language. I have used a Telstra sim card since then. Recently, I updated the legit software on my phone only to find that it had locked. No one including Samsung can give me the network unlock key and DW International have not been able to suppy it either. They want me to send the phone into them but what I want to know is what happens when I next want to update my software. Will I have to go through the whole thing again.

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