Apple is still expensive, but the whole "Apple Tax" meme is a myth. We pay barely more than GST than the US for Apple products, which are also never advertised with sales tax. http://anthonywrites.posterous.com/apple-tax-for-australians...

I think it's more to do with, like you said, Android phones covering such a huge spectrum of the market. Also that flagship models are often hugely discounted. Australian's love bargains.