iPod pricing – an objective view
CommSec, an Australian financial and share services company, recently released their latest iPod Index, a way at looking at issues such as the impact of currency changes on consumer spending, globalisation and retailer margins.
iPod Index
The iPod Index, similar to the popular Big Mac Index, gives an indication of foreign exchange movements based on Apple's iPod music player. It further gives an idea of the relative price of the players in various worldwide countries based on taxes, currency changes and other factors.
“Both indexes work on the theory of ‘same good, same price’. That is, that the same good should trade at broadly the same price across the globe if exchange rates are adjusting properly,” CommSec points out.
The company however pointed out that while the whole process looks good in theory, it is more difficult in practice. “Prices can by distorted by a range of factors such as taxes, transport costs, labour laws and trade barriers like tariffs.”
“The key difference between the iPod and Big Mac approaches is that Big Macs are made in a host of countries across the globe whereas iPods are predominately made in China.”
The CommSec iPod index was launched in January and has since then shifted from the old iPod Nano 2GB model to the new 4 GB model.
Country Comparison
According to the new index, Hong Kong is the cheapest country with a relative price of $ 148-12, followed by the US at $ 149-00 and Japan with $ 154-21.
Brazil is the most expensive country with a relative price of $ 369-61, followed by Bulgaria with $ 318-60 and Argentina with $ 317-45.
South Africa is listed as 19 th most expensive on the 55 country index with a relative price of $ 226-60.
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