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Adobe responds to CS4 pricing criticism

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Colin Barker ZDNet.co.uk

Published: 03 Oct 2008 12:34 BST

Adobe, which has faced criticism for the high price of its software in the UK versus its US price, has responded to its critics by saying that the difference in the price was because of many factors, and particularly the "economies of scale of doing business in the US".

ZDNet.co.uk recently reported that the Creative Suite 4 (CS4) Master Collection flagship product will cost £2,313.58 in the UK, according to Adobe's pricelist, and just $2,499, or £1,358, in the US: a saving of over £1,000.

Last year, the issue also also caused criticism at the launch of Creative Suite 3.

ZDNet.co.uk approached Adobe for comment on our original report about the CS4 pricing discrepancy, but the company said it was unable to comment at that time. On Wednesday, that comment was forthcoming, and the company explained the reasoning behind the high price in the UK.

Deciding on the pricing is "a challenge for us" said Dave Burkett, vice president, business operation, Creative Solutions at Adobe. "We really talk to our customers to get the pricing right."

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Adobe Creative Suite 4 Master Collection: A first look

One factor was the relative "cost of doing business in the two countries", Burkett said. "We want to make sure that we are giving them the best products and at the right price."

There are two main factors, Burkett said. The first factor was "the cost of doing business in each country and in the US we get economies of scale", he said. "For example, there are many more resellers in the US than there are in the UK and in other countries." The cost of doing business varied, he said, and there was a significant difference in that cost "between say, London and Milan", he said.

Also, Adobe markets its products directly to the customer, and Burkett said that, in the UK, the company was running the Creative Pro Expo in London over three days later in the month, together with major exhibitions and presentations of the new CS4 software at seven other venues in the UK and Ireland. These were expensive to set up and organise, Burkett said. He also pointed out that CS4 was available in the UK "at exactly the same price as CS3 was and there are many more features in CS4", he said.

The second major factor, said Burkett, was that "there is a difference in the perceived value of the product" between different countries. "We reach out and try to find out what that value is and why."

In addition, as part of the launch activities around CS4, Adobe was introducing some special prices on some of the individual Adobe products, said Burkett. Photoshop, for example, will lower its cost by £197 while the promotion lasts, which is until the end of March 2009, according to Adobe.

One point Adobe wanted to clear up was the actual price it was charging. The price of the flagship Master Collection was £1,969 excluding VAT, and £2,313.58 including VAT, and not ex-VAT as originally indicated.