Category Archives: Technology

Big Mac versus iPad Mini

Some of you might be familiar with the Big Mac Index, an index calculated by The Economist that compares the prices of Big Macs across countries (see Economist BMI Page). The underlying idea is that, by comparing the relative cost of Big Macs, we can get a sense for whether exchange rates appropriately equalize the prices of goods across countries in the manner suggested by Purchasing Power Parity (PPP) theory. If the price of Big Macs is not equivalent across countries, some take that to suggest that currency exchange rates are out of whack – i.e., one currency is overvalued while the other is undervalued.

Irrespective of what you believe about the Big Mac Index – whether you think it truly is indicative of exchange rate imbalances, or simply exposes shortcomings of PPP theory – it has gained currency amongst economists, though admittedly, mostly as a humorous diversion.

Nevertheless, Benn Steil and Dinah Walker, bloggers at the Council on Foreign Relations, offer an “updated” version of such an index by examining the relative prices of a product that they argue is likely to be more homogenous from country to country – the Apple iPad Mini (click on the figure below to see a larger image, or visit CFR iPad Mini Index for the full story).

ipad-mini-index-BIG2

Compared side-by-side, the Big Mac and iPad Mini indexes differ markedly. So who has it right? Or is this just further evidence that PPP theory needs to be revisited?

 

More on this topic (What's this?) Read more on Apple, Big Mac Index at Wikinvest
Posted in Economy, Humor, International Business, Technology | Leave a comment

Media Appearance: Kodak Bankruptcy

Last week I appeared on Xinhua’s CNC World Report discussing the Kodak bankruptcy.

The discussion centered on Kodak’s history and its response to industry change. As I mentioned in the interview, Kodak was unable to change its internal culture so as to benefit from the shift to digital photography – technological change that, paradoxically, it helped usher in. Kodak did not realize the potential of digital photography early enough and it reacted late, by which time it was far too late to play catch up.

A little snippet:

As film began its path to obsolescence, Kodak missed the opportunity on several occasions to jump into the digital world. It first underestimated the impact that digital would have on its business and then it ignored what it might mean…Once it tried to jump in it was far too late.

You can watch the full clip below (or by clicking on this link):

Posted in Bankruptcies, Corporate Strategy, International Business, International Strategy, Technology | Leave a comment

@RobertSalomon: Caving in to Technology

I resisted for as long as I possibly could, but I finally broke down and decided to become a twitterer (tweeter??).

I know, I know – I’m way late to the party. However, in the week or so I’ve been fooling around with the micro-blogging service, I’ve found it easier to post links to interesting articles. It’s also easier to toss out half-baked ideas. Time will tell whether I stick with it…

Nevertheless, for those of you feeling so inclined, you can follow my twitter feed @RobertSalomon.

Posted in Technology | Leave a comment