A year ago I wrote an article that compared iPod prices around the world to figure out, with currency fluctuations and inflation taken into account, where you could find the cheapest iPod. So this year, I’m going to figure out where you can find the cheapest iPad (the WiFi 16Gb) calculating the Real Exchange Rate.
A few assumptions that are probably not true in real life!
No transportation costs (very hypothetical)
Trade flows freely across all borders (i.e. no tariffs).
The Demand for iPads doesn’t affect the price
Note: All prices indicated are exclusive of taxes. Also, China produces all iPads but it is an American product, so we shall take America as the home country. The iPad in America is $499 + tax (assuming about 10% = $550)
Real Exchange Rate = (Nominal Exchange Rate) x (Price abroad/Price at home)
If any of the Real Exchange Rates were less than 1.0, then someone could buy an iPod in their country and sell them in the US. One of the drawbacks is that the exchange rate that was used is a current exchange rate, taking a yearly average would be more accurate.
Surprisingly the cheapest country to buy an iPad is Malaysia.
Brazil sells the most expensive iPads.