When is an App Store price-rise not an App Store price-rise? When it’s currency ‘rebalancing’!
As MacStories and others have reported, Apple last night adjusted a bunch of App Store prices. Some countries saw price-drops, but others—such as the UK—saw price-rises. Except they sort of didn’t. I’ll explain.
In the UK, the average change in prices has been, according to Tap! magazine, about 17.5%, which some people are complaining is well over the rate of inflation. The thing is, the App Store prices haven’t really changed at all, because they’re all (very lazily) pegged to the US App Store. If you go there, you’ll see that an app that cost 99 cents yesterday still costs 99 cents today. But in the UK, the lowest tier of 59p is now 69p.
So what happened? Apple simply rebalanced its currency conversion across the App Store, for the first time, and, if you check out the value of Sterling over the past five years (Yahoo! Finance), it’s easy to see why. When the App Store was launched, and during the time leading up to it, the exchange rate was almost $2 = £1. Apple therefore did its usual thing of dropping the rate a bit as a cushion and launched the store. And then Sterling tanked. By January 2009, it hit a low of $1.37, and although the currency has recovered a little since then, it’s spent most of its time hovering between $1.50 and $1.60.
This means that, while Brits won’t be happy about the ‘price rise’, we need to understand that App Store prices have been cheap, relatively speaking, since the App Store was launched. This is even more obvious when you take into account that UK prices include taxes, whereas US ones don’t. Some might call that poetic justice, given the ambitious pricing of TV shows and movies on the UK store. Regardless, the new tiers are likely here to stay for some time, unless the UK economy somehow heats up in a big way. Also, it’s worth noting, in bold, in case you otherwise wouldn’t notice, that iOS apps and games are generally insanely cheap and so a smallish price change doesn’t really matter. If you’ve spent 500 quid on a phone but now won’t buy Super-Duper New Game because it’s just ‘shot up’ in price from £1.79 to £1.99, I really don’t want to talk to you any more.
Indeed..
Having waited patiently for my first AppStore Income amount, knowing the number sold, and the “about 30-odd p per sale”, I was gobsmacked once I realised the $/£ ratio was SUCH a huge gap. I ended up with about a third more than I’d expected.
Awesome!
The difference was WAY off, and.. although it’s kind of a bad thing for us in the UK, it’s not really as bad as it seems. They’re just trying to balance it out.
Dear god there’s a lot of uninformed entitled bitching on the internet about this one isn’t there?
Quite. People are arguing with me on Twitter about this, saying Apple should have set prices to take into account currency fluctuation. I can’t imagine anyone in 2008 would have foreseen Sterling tanking to the degree it did or the Aussie dollar becoming frighteningly powerful.
But, man, that extra 10p for an app is going to hurt, right?
If these people saying that are so good at predicting a currency fluctuation of nearly 40% then they’ll have made so much money in the market’s that an app store price rise won’t even be on their radar.