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Not app-y with VAT: Apple bumps up prices in Blighty, Europe, Canada
Cupertino gives $10bn to devs but something's upset the Apple cart
Updated Apple is enjoying a super-soaraway January: its App Store has cleared nearly half a billion dollars in sales in just the first seven days of the month, we are told.
New Year’s Day set the record for the largest number of App Store sales in a 24-hour period, and Apple reports sales in 2014 were up 50 per cent on the previous year. The iGiant said sales in the previous 12 months had earned developers more than $10bn and brought Cupertino’s cumulative payout to coders above $25bn.
"This year is off to a tremendous start after a record-breaking year for the App Store and our developer community," Eddy Cue, Apple’s senior vice president of internet, software and services, gushed today. "We're so proud of the creativity and innovation developers bring to the apps they create for iOS users."
It was also a good Christmas season for the Bono-founded RED campaign, which raises money to fight AIDS. In November Apple set up Apps for RED, a group of 25 applications where the total sale price of each program went to the charity for a week, and the firm reports this helped raise over $20m.
Entirely coincidentally, Apple made a quieter announcement in a memo to software developers on Thursday morning, informing them that the firm will be jacking up App Store prices outside the US (with a few exceptions) by the end of the week.
“Within the next 36 hours, prices on the App Store will increase for all territories in the European Union as well as in Canada and Norway, decrease in Iceland, and change in Russia,” the memo, obtained by 9to5mac, reads.
“These changes are being made to account for adjustments in value-added tax (VAT) rates and foreign exchange rates. We will simultaneously update the Pricing Matrix in Rights and Pricing in My Apps on iTunes Connect. We will also update the iOS Paid Applications and Mac OS X Paid Applications agreements, which will be available in Agreements, Tax, and Banking.”
No other details of the new pricing were included, but we’ll find out soon enough, but it’s going to be unpopular. Thanks to the vicissitudes of the currency market and Cupertino’s beancounters, Apple fans who don’t fork over dollars already pay a slightly higher price for their App Store purchases.
For example, a $0.99 app in the Land of the Free costs €0.99 and £0.69, which translates to $1.17 and $1.04 respectively. Apple traditionally claims this is down to the higher cost of doing business overseas. ®
Updated on January 9
Apple has, indeed, upped prices in its App Store for people in Europe and Canada.
Brits must pay £0.79 ($1.19) from £0.69 for the cheapest paid-for software, and for their European cousins the price has gone up to €0.99 ($1.17) from €0.89. Canadians are also getting a rise to CAN$1.19 ($0.99) from CAN$0.99 as a base price.
There was no official word from the world's most valuable company (in stock-market terms, at least) as to the reason for the price rises. But it looks like another one of Cupertino's annual price adjustments, ostensibly in response to currency fluctuations.
Certainly that's true in the cases of Iceland and Russia. The former will be getting a slight price cut to help it deal with 24 hours of near darkness, while it's going to be a brave accountant who guesses where the rouble is moving in the next year or so.
It might seem like these are tiny changes, but that sure adds up. As Apple has just pointed out, the firm's digital store front pulled in more than $3bn last year, so it has to watch every penny to do better in the next one and keep investors and rent-a-quote pundits happy. ®