Comparison Shopping on Computers: Canada vs USA vs UK

There has been a lot of complaining lately on the slow downward movement of prices in Canada compared to the USA. Since I probably will soon be in the market for a new computer and I have the luxury of buying it in the UK or in Canada as I travel back and forth between the two countries a lot, I decided to do a simple comparison. Computers have the convenient property of being pretty well standardized worldwide so it is easy to make apples to apples comparisons, especially when there are are worldwide vendors like Dell Computer, whose online ordering and configuration website make it possible to build the identical machine for different countries. Purchasing power parity would lead us to believe that identical items in different countries should have the same price after currency conversion.

Below are the results of my little experiment on the delivered price, including taxes and shipping, for a Dell Inspiron 530s. The only substantial difference is that the Canadian version has Windows Vista Home Premium while the US and UK versions have XP Professional. There might be a price difference on that account but since Dell offers some systems with a choice of Vista or XP at the same price, surely there cannot be a big difference in the total cost of the system.

The currency conversion rates are those on Yahoo as of today UK£ = 1.9528 C$ and USS$ = 0.9344 C$.

Total Delivered Price

• UK £597 = C$1165
• USA $1158 = C$1082
• Canada $1435, or 23% more than the UK and 33% more than the USA!!

Looks like I will be buying my next computer in the UK, not Canada. I used to think that the UK's cost of living was shockingly high compared to Canada's but the substantial rise of the Canadian dollar against the pound sterling is changing that situation. My cost of living (in C$ terms) here has declined by about 10% in the last year as a result (which is a great consolation, since my portfolio investment losses in the Vanguard Europe ETF (VGK) have thereby been offset to a large degree).

A final insult is that only Dell Canada does not offer any systems with Ubuntu Linux, an operating system I have been happily using on a 2000 vintage Dell laptop. In fact, the only reason I will replace the laptop is an intermittent and growing hardware malfunction (my cursor seems to wander uncontrollably around the screen at times). Linux will enable me to use the hardware till it breaks, as opposed to having it become obsolete in half the time due to software bloat in the Microsoft environment.

Dell Computer in particular has no excuse for the above pricing differences since it doesn't manufacture any systems in Canada and since it manufactures PCs as and when they are ordered and so has no inventory pipeline with embedded costs to cycle through that might somewhat justify a delay in adjusting prices downward.