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The iPod International Currency Index
Snad writes "The BBC is reporting that an Australian bank has adopted the price of Apple's iPod as a means of tracking international currency values. Similar to The Economist's Big Mac index, this 'iPod index' tracks the price of a 2-GB iPod Nano around the globe and uses purchasing power parity to determine relative currency value. A sample quote: '"The index suggests that the US dollar has potential to appreciate against a range of major currencies, with the Australian dollar about 15% overvalued against the greenback," said Craig James, Commonwealth Securities' head economist.' The cheapest place to buy an iPod is Canada — $144 (but Hong Kong and Japan are almost as cheap); the most expensive is Brazil — $327."
1 song = 1 $ = 1 = 1 £
IANAE but there's a crucial difference with other pertinent indices. Bic Macs as are consumed. Oil, by way of another example, is also consumed. Apple's portable music players (ffs) are sold (or given away) and then just used like any other non-consumable, non-disposable commodity. I really can't see how this is anything other than a gimmick.
The index computation does not seem to take into account the taxes (for the local **AA) that some countries are levying on MP3 players.
Have you read TFA??! This has nothing to do with the iPod as a music player. O why am I even responding.
-- Cheers!
Uh oh Apple! Some guy on the internet said your player sucks, better listen to him or else! Ignore the millions of sales every quarter, they obviously never met this guy on the internet! The INTERNET!
Monstar L
In the 80s the price of a mars bar was used as a method of measuring relative costs.
The cost of a mars bar reflects raw material costs, energy costs, labour costs, transport costs and local taxation.
It's a good yardstick to measure prices between places and over time.
Sounds like the same principle is being applied with iPods, with the added advantage that the mention of the word ipod guarantees coverage, more so than something as mundane as the price of a mars bar
echo $SIGNATURE
This is not very useful: the market value and intended targets of the iPod change from country to country.
You can safely assume the shiny gadget is a consumer good in the US, most of Europe, Japan, and other similarly rich countries. But in much of the developing world, it is a luxury item that local distributor(s) can afford to overprice (compared to its value in other markets) because they are only going after the 0,1 percent of wealthy people that can afford the item regardless if it costs 250 or 450USD. For this to make any sense, of course, you need to keep in mind that in many developing countries, there is no such thing as a large middle-class.
The Economist's Big Mac index is flawed for another, similar reason: going to Mc Donald's is considered cheap and unfashionable in Paris, France, while it the most hype thing to do in Cairo, Egypt, or Guangzhou, China. So despite the fact that you are talking about the exact same BigMac & fries, you are not considering the same product, because its perceived value changes considerably from place to place. I think I remember reading an Economist article that aknowledged this.
Hello! I'm a disaster waiting to happen!
The Big Mac index is so good because the price of the Big Mac involves a little bit of everything: tradable products (meat, bread, etc), labor, services, rental, etc. It is cheap, and usually not subject to any special taxes. The iPod is an imported luxury good, and thus its price is subject to arbitrary decisions by dealers and governments. No good.
Most expensive nano, most expensive PS3 (the 60GB version was R$8000 at launch - thats 3270 fscking dollars!!!!) And this in retail stores, not eBay or similar. Probably most expensive Macbooks as well. You know, we are all filthy rich here, so we don't mind paying such outrageous prices. Sigh.
Where is that guy who'd die defending what I had to say when I need him?
Unless you consider a Big Mac to be fine cuisine, and American Idol to be the most insightful television show available, sales aren't really a good indicator of quality.
The reasoning behind the Big Mac index is that for the most part, McDonalds tries to produce the burgers using the cheapest available inputs. Thus, the Big Mac index is representative of the cost of a bundle of food-related inputs. Much of the time, this means locally produced inputs. A country with low cost beef and wheat will have relatively cheaper Big Macs, whereas countries with expensive beef and wheat (or high input tariffs) will have relatively more expensive Big Macs. In the long run, a country with cheap inputs will tend to export to countries with expensive inputs, thus weakening the currency of the importing nation and strengthening the currency of the exporting nation.
The idea of an iPod index makes no economic sense. The reason that an iPod is expensive in Brazil, India, and Thailand isn't because labor, LCDs, and Flash Memory are expensive in those countries. An iPod costs the same to produce no matter where it is sold. The only main difference is in import duties and sales taxes. Import duties and sales taxes have nothing to do with the long-term direction of a country's currency. This index is a waste of time.
It also doesn't take into account how local laws affect prices.
Finnish consumer protection laws are quite demanding, which causes higher prices.
Example: My iBook display stopped working after 18 months of use. I took the display apart and found that the display hinge had eaten into the cable. Because the cause of the problem was an incorrect design of the hinge, Apple had to replace the cable, with no cost to the consumer what so ever.
In the United States, you would propably have voided the warranty just by opening the display case. Here, the manufacturer has to show that problem was caused by incorrect use of the product to avoid paying for the repairs during the "expected lifetime" of the product. ("Expected lifetime" depends on the type of the product. With computers it's somewhere between 2 and 3 years.)
So, Americans get cheaper products, but have to pay for "Extended Apple Care" and such.
Quidquid latine dictum sit, altum sonatur.
You really can't calculate a meaninful exchange rate based on the price of a single product, unless the economies of the two nations are inherently similar. Yes, MKs in Africa figure exchange rates based on the price of Coca-Cola, but that's between countries with more-or-less the same economy, and it's inherently an informal calculation anyhow. You can't meaninfully compare the currencies of the US and Australia that way, much less the US and Brasil.
The problem is that different kinds of goods and services are more or less expensive in different economies. You can get VERY different ideas about the exchange rate, depending on which product you look at. In one country, technology is cheap but labor is expensive. In another, technology is unaffordable but labor is cheap. In another, both technology and labor are expensive but food is cheap. If you compare currencies based on one product, you can get yourself quite seriously confused.
Exchange rates are also driven by trade balances, and just because one US dollar can be exchanged for eight billion Ubledubgongian Frankls does not mean that a product worth one dollar in the US will cost F8 billion in Ubledubgong. It may only cost 250 Frankls. Going the other direction, just because exchanging one US dollar only gets you 50p in England does not necessarily mean that 50p has the same purchasing power as $1 would have in the US. People who don't understand economics tend to assume it works that way, but it doesn't.
Cut that out, or I will ship you to Norilsk in a box.
The Big Mac Index is more suitable because it is a local index.
...) and the local reseller cost and worldwide shipping cost.
Because for a Big Mac you look at the local costs and industries.
(packaging, local labour cost, local agriculture (salad, meat...))
For an iPod you only measure the chinise output (packaging, chinese labout cost, chinise raw materials
Grundgesetz * 23. Mai 1949 - 30. November 2007 - http://www.vorratsdatenspeicherung.de/
This site goes to 11.
Did you know that ipods only support 2 video formats (both of them MAC formats)
Last time I checked, the formats were MPEG4 and MPEG4-AVC/H.264 - hardly "MAC-only" formats!
Confused australians are trying to plug their headphones in to Big Macs. We interviewed Dwayne Bushtucker who said 'I read that they used to use Big Macs for their research but now it was iPods but I figured I'd check if they were compatible. I guess not...'
I want a list of atrocities done in your name - Recoil
Argentina not so good either. We are almost as bad as Brasil
i on=producto&code=465
Check it yourself, direct from Apple Argentina:
http://www.macstation.com.ar/store/index.php?secc
999.00 pesos!
999 / 3.11 (current american dollar convertion) = 321.22 dollars!!!!!!!
It's a steal.