iPod Touch price dropped to 199 euros?

with the dollar dropping like a rock, Apple comes out ahead even if slashing the price.

Europeans can read the financial pages, too. They haven't liked Apple's pricing policy (pricing their wares in the same # of currency units in Europe as in America even though the euro is worth so much more than the dollar) for some time now.

This is one of those things that rarely matters, but with the poor value of US dollar today, it does now. US$ and EUR pricing has always been at parity. This is normal, since no manufacturer, no matter where they are based, wants to keep adjusting retail pricing based on the currency fluctuation. Otherwise, all those Hyundais, Toyotas, Hondas, not to mention BMWs, Audis, etc., would cost much more in the US today than they did last year. In most markets, products tend to hold onto their local-currency pricing, for practical reasons. Under normal conditions, this is OK, since currencies don't fluctuate that wildly. However, with the steep drop of the US$, EU consumers are increasingly asking why are Americans paying so much less for the same stuff. And it is true; it's not that Europeans are paying more; this stuff is not made in the US; it's made in China. It is the Chinese manufacturers that are absorbing the losses due to the US$ drops, in order to protect the American consumer. How long this will last is a million-dollar question.

Who is Apple going to cater to first? Who's currency are they basing their business and money in the bank on? That's right, As the money they have to work with now becomes worth less, so does the money that everyone else in the US has to spend. Adjusting prices upwards in US dollars would just be fueling the problem, and TURN AWAY buyers, who may now count on them to DROP prices before they buy a new player. In essence, foreign currency users are still paying the same, and we're paying less.

Fighting inflation, besides all of the wall street and economic polcy measures (ie. drilling in ANWR) is going to take market actions like this- lowering profit margins. If everyone adjusts up, there will be no end. So, sorry to all you euros out there, but it looks like Apple isn't going to bite the bullet for you too just to be fair.

except it seems to be doing exactly that, by lowering the iTouch price only in the EU, and not in the States.

Still, I'm sure this is just an aberration, and everything else will remain as before.

In normal economics its the other way around, the price Apple has to pay in China should go up when the dollar goes down. Some sunny day they will want Euros and not Dollars.

If Apple wants Euros then, given that the current downturn is global and not local, they may finally be forced to reverse their decades old policy of screwing their European customers and introducing consistent pricing (notwithstanding regional variations in sales taxes, VAT etc.) in an effort to merely hold on to what they have both in the U.S. and elsewhere. Otherwise, Euro-Apple sales will shift to the burgeoning number of American grey marketeers selling U.S. retail stock directly into Europe at reasonable margins that still undercut Apple's euro-pricing disgrace!