News Service from House Harris

Aust now cheapest place to buy an iPod

SYDNEY, Nov 2 AAP - Australia is now the cheapest place in the world to buy an iPod, thanks to the Australian dollar's sharp decline, a new study shows.

And it's not just good news for music lovers, with CommSec saying the currency's decline will boost Australia's trade competitiveness and help insulate the nation from the global economic downturn.

The CommSec iPod index shows that Australia is the cheapest place among 62 countries to buy an Apple iPod 8gb nano music player. It ranked as the 14thcheapest in July.

CommSec chief equities economist Craig James said the sharp drop in the Australian dollar had improved the currency's competitiveness, although the question now was whether it had fallen too far in relation to other currencies.

"While the local price of an iPod has actually fallen since July in line with other countries, the Australian dollar has fallen further than most currencies against the greenback - down over 45 per cent - thus boosting Australian trade competitiveness," Mr James said.

The CommSec iPod index is a light-hearted look at currency movements and purchasing powers, in a similar way to The Economist magazine's index based on McDonald's Big Mac.

In Australia the new 8gb iPod model is now priced at199.

On the CommSec iPod nano index, Australia's price comes in atUS131.95.

Mr James said Australia is the cheapest place in the world to buy an Apple iPod by a considerable margin.

"South Korea ($US139.72), Canada ($US138.73) and Indonesia ($US138.47) are vying for second spot, but prices in each country are around five per cent dearer than in Australia," he said.

"The sharp fall of the Australian dollar since July will boost trade competitiveness and assist in insulating Australia from the downturn in the global economy.

"Over 2000 and 2001, the Australian dollar fell by 28 per cent to a record low of 47.75 US cents, helping to insulate the economy from recession in the US."

Mr James said manufacturers and the tourism sector were the main beneficiaries of the currency decline, adding that while global prices of manufactured goods had remained steady, commodity prices had fallen in line with the currency.

For Australian tourists, the Aussie dollar's decline means that they may have to forgo that overseas shopping expedition.

"Clearly it's far cheaper to be buying goods here in Australia than in places like Asia or the US," Mr James said.

And foreign tourists may have an added reason to visit Australia, with a British visitor now able to buy an iPod here for just over 81 euro, saving around 25 per cent on the 109 euro local price in the UK.

According to CommSec's index, Argentina is the dearest place to buy an Apple iPod ($US353.20). In the US it costsUS149.