The conversion of prices from dollars to the British pound has always been a bit of a mystrey. But nothing is more baffling than the new prices given to the iPods. The top of the range iPod Nano (Black) costs $249 or £169. The bottom of the range traditional iPod also costs $249. But wait for it… it costs £189.

There is clearly something funny going on here. An extra £20 has come from somewhere. Either Britain is being ripped off for the traditional iPod or Britain is getting a bargin on the iPod Nano. I know that the price conversions to pounds are quite complicated. First they have to be converted to pounds, then VAT is added and then they have to made into a sexy price… probably by some rounding up. I decided to investigate this process.Lets first take an example outside of this conflict. Say the iPod Nano 4GB. There it is $199 or £129. A direct conversion of dollars to pounds says that $199 should be £105.75. Now take VAT at 17.5% it comes to £124.25 which they round to the £129 price tag. So this method of conversion seems to work well.

Lets now try it on the iPod Nano 8GB (Black). So we take the $249 and we get £132.57. Plus the 17.5% VAT gives £155.77 which is quite a bit less than the £169 that the British are made to pay. But if you think that is bad then look at the £189 that is charged for the full iPod (30GB) that is a full £33 above the price worked out through considering tax.

So lets take a little closer look at this price conversion process. Below I list the price differences between what the British prices should be (including tax) and what they are.

iPod Shuffle: £5.53 - $10.38
iPod Nano 2 GB: £5.69 - $10.68
iPod Nano 4 GB: £4.75 - $8.92
iPod Nano 8 GB: £13.23 - $24.83
iPod 30 GB: £33.23 - $62.35
iPod 60 GB: £40.47 - $75.93

Quite a premium on the highest range iPod too. It is just it was much more noticable for the 30 GB iPod given the same price was used for it and the iPod Nano 8 GB.

I can’t do such an indepth analysis for other country stores as I am not aware of taxes that may be applicable. One thing I can see without any knowledge of customs and taxes is see if the price of the 8 GB Nano is the same as the 30 GB iPod in each store.

And it is in:

Australia, Canada, Japan, Singapore, and the USA.

But it isn’t in:

Austria, Belgium, Denmark, Suomi, France, Germany, Hong Kong, Republic of Ireland, Italy, Luxembourg, The Netherlands, Norway, Spain, Sweden, Switzerland, and the UK.

The pattern is pretty clear. Europe and Hong Kong (where the price increment for the iPod 30 GB is very slight) have the different prices. That is the majority of the courtries that are offered by the store so the question should perhaps not be why the prices are different in all of these places but why they are the same in Australia, Canaga, Japan, Singapore and the USA. It seems completely crazy. Perhaps some EU wide tariff only on things with more than 8 GB of storage? It just doesn’t make sense.