Rising cost of iPod nano is not sweet music to Brazilian ears

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) July 27, 2007 -- BRAZIL remains the most expensive place to buy a 2GB Apple iPod nano, and the price has risen 32% to almost $435 (E314, £211) over the past six months, according to the latest iPod Index.

The index, which was launched in January by Commonwealth Securities, a Sydney-based retail brokerage, also revealed the cheapest place to buy the ubiquitous music player is Japan, where it retails for $147.

Six months ago, the cheapest iPod was to be found in Canada, where it sold for $144. That price tag has risen 12% to $161.

The index was developed as a challenge to The Economist's Big Mac Index, which this year celebrates its 21st anniversary as a tongue-in-cheek barometer of global exchange rates. Craig James, chief economist at Commonwealth Securities, argues the iPod Index, which considers the price of nanos in 52 countries, is a more accurate gauge of global inflationary pressures.

The Big Mac index is based on the theory of purchasing power parity, which argues that, in the long run, exchange rates should move towards levels that equalise the price of an identical basket of goods and services (in this case, a Big Mac) in any two countries.

But the biggest difference between the two indices is that while Big Macs are made in a host of countries, iPods are predominantly made in China. So, in theory, the music player should cost broadly the same.

"The US dollar has continued to weaken against most currencies over 2007 but global prices for iPods haven’t really budged," explained James. "While competitive challenges do differ across the globe, Apple and its resellers will be under pressure to pass more savings on to consumers in coming months."

The UK is near the middle of the pack for iPod pricing, being the 19th-cheapest place to buy the music player, with a price tag of about £99 (e148, $204) – the same price as in Ireland. In Italy, the Netherlands, Germany and Spain, it will set you back approximately $206.

James added: "The Apple iPod is not your average product."

"The MP3 player is in strong demand across the globe, arguably giving it the luxury of some pricing power. So if prices of iPods can be cut, importers will find it hard to justify not cutting prices for a raft of foreign goods."

Source: http://www.thebusinessonline.com/