Microsoft bumps up prices, blames poor Aussie dollar

Microsoft Australia will be bumping up prices of its products by 10 per cent, blaming the weak exchange rate for its decision.

The increase will take effect from October 1, 2001 and will affect most of its full package products and volume licensing agreements. This change follows a similar price increase the software giant made in October last year.

Fearing a consumer and reseller backlash, Microsoft had been holding off the price hike for months. "This was not a rash decision," said Alison Dodd, marketing manager for Microsoft Australia. "We have been watching the exchange rate for months and we have been putting off making an adjustment for a while.

"We have done what we can over the past few months to hold prices for our products constant, but the continuing fall of our dollar against the US currency has meant that the pricing differential is no longer sustainable," claimed Dodd.

Once the increase takes affect, Microsoft will be reviewing pricing on a monthly basis in comparison to the exchange rate and will adjust pricing if the Australian dollar rises or falls consistently for two months.

The advantage of this, explained Dodd, is that consumers will only face small incremental adjustments rather than larger price increases once or twice a year.

"But this is not a good news story," Dodd said. "If the exchange rate was at 57 cents then we wouldn't be doing this."

Dodd said customers who are signed to an enterprise agreement will not be affected by the price increase.

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