America has become the cheapest place in the world to buy an iPod Nano from Apple (AAPL), thanks to a falling dollar vs. other major currencies, according to the October iPod Nano Index by Commonwealth Securities’ (CommSec).
In a similar fashion to The Economist’s Big Mac Index, the iPod Nano index aims to expose currencies’ relative under- or over- valuation via the price of a single uniform product around the world.
CommSec: Both indexes work on the theory of ‘same good, same price’. That is, the same good should trade at broadly the same price across the globe if exchange rates are adjusting properly.
The most expensive Nanos in the world are found in Argentina where they go for $336.43. Brazilian Nanos cost a rich $333.56 as well. Both of these examples are more than double the U.S. price of $149.00.
Many European countries are also far more expensive than the U.S.. Eastern-European Nano’s cost $220 – $240 while French ones are $222.06 and Germany’s go for $207.15.
While the index is far from perfect, and it could show that Apple might have to adjust its global pricing a bit, the comparison it provides still makes a reasonable case that U.S. dollar could be undervalued versus the currencies of countries with some of the most extreme price discrepancies; such as Argentina, Brazil, or South Africa.
Even if you don’t believe that currency markets will actually move to correct the price discrepancies in this report, then you still have a way to make money — trade iPods between mis-priced countries until prices adjust.
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