Bloomberg News

Apple Says It May Offer iPad Refunds to Customers in Australia

March 27, 2012

The Australian Competition & Consumer Commission yesterday said Apple misled consumers by suggesting the new iPad connects to 4G networks, when that’s not the case. Photographer: Ian Waldie/Bloomberg

The Australian Competition & Consumer Commission yesterday said Apple misled consumers by suggesting the new iPad connects to 4G networks, when that’s not the case. Photographer: Ian Waldie/Bloomberg

Apple Inc. (AAPL:US) said it’s prepared to offer iPad refunds to Australian customers after the nation’s consumer commission accused the company of misleading people that the new tablet is compatible with local 4G networks.

The company also plans to post a statement on its website and at stores to alert consumers that its iPad 3 isn’t compatible with Telstra Corp. (TLS)’s 4G network, also known as long- term evolution, or LTE, Paul Anastassiou, a lawyer representing Apple, told a Federal Court in Melbourne today.

The Australian Competition & Consumer Commission yesterday said Apple misled consumers by suggesting the new iPad connects to 4G networks, when that’s not the case. Apple’s refund proposal came today as the commission sought a court order including injunctions, monetary penalties and refunds.

The new iPad is priced at $499 to $829 in the U.S. and includes a chip that enables better graphics than with previous models. The device is also compatible with U.S. 4G wireless services that deliver data faster than earlier networks. The tablet sells for A$429 to A$899 ($448 to $939) in Australia.

The new iPad, advertised as Wi-Fi + 4G, uses the 700 megahertz and 2,100 megahertz frequencies, which are not compatible with Australian 4G service. Telstra, the only telecommunications company with a working 4G network in Australia, uses the 1,800 megahertz frequency.

Network Compatibility?

Apple never claimed the new iPad would be compatible with Telstra’s LTE networks and is now discussing with the commission about the content of a clarifying statement to be issued later, Anastassiou said today.

Judge Mordecai Bromberg said he may set dates for the next hearing of the case when the court resumes later today.

The iPad, first introduced in 2010, is Apple’s biggest source of revenue after the iPhone. The new version features a high-definition screen and a faster processor.

Apple Chief Executive Officer Tim Cook has said he thinks purchases of tablet computers including the iPad will eventually surpass those of personal computers.

To contact the reporter on this story: Soraya Permatasari in Melbourne at soraya@bloomberg.net

To contact the editors responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net; Andrew Hobbs at ahobbs4@bloomberg.net


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