With the news that Apple is going to raise its prices in its App Store in several markets including Canada, developers and consumers are waiting for the most important question: how much?
The company sent out an email to its developer community on Wednesday say that the “changes are being made to account for adjustments in value-added tax (VAT) and foreign exchange rates.” Beyond Canada, increased rates will occur in the European Union and Norway, a decrease in Iceland and a change in Russia.
Apple said the changes take effect in the next 36 hours, so by Friday, the new pricing structure should be evident soon enough.
“From what I can tell, no one actually knows what price they are going to use yet. I’ve looked through all the developer stuff and they haven’t told us the final price yet,” said Matt Rix, a Brampton based game developer who created app games Trainyard and Disco Zoo.
“It’s obvious that .99 cents is just a nice looking price. It’s that psychological threshold that you want to have stuff that is below a dollar. I can’t see it rising too much.”
“It’s a leveling of the playing field ensuring the revenue generated, or the cost for the customers, are on par globally,” said Mark Pavlidis, co-founder of Flixel Photos, which produces the Cinemagraph line of software for Apple mobile devices and Mac computers. “Consumers were getting a good deal but from a developer’s point of view it’s like, ‘Hey, we’re getting shortchanged here because it’s not at the kind of price tier of where the current exchange is.’ ”
Based on how Apple has adjusted its App Store prices in other countries for currency fluctuations, Pavlidis predicts we’ll see a bump up of maybe 10 per cent, taking a 99 cent app to $1.09.
Rix took a look at the pricing for Trainyard in other territories, and while he admits he is totally speculating, he did find an interesting parallel with Australian pricing.
“In Australia right now, it’s a $1.29 for a 99 cent game here, for example,” he says. “The Australian dollar is 81 cents (U.S.) and the Canadian dollar is about 85 cents, so it’s not that different so we might be looking at a similar change, it might be something like that.”
Rix also adds that since Apple hasn’t raised prices like this during the App Store’s six year existence, the new price will likely be one that sticks for a while.
Apple does not comment on rumours or speculation and the company’s PR department wouldn’t confirm what the new price change will be. Developers will still be setting the price for their apps, but the company is updating what it calls its ‘pricing matrix’ with the new approved prices.
Apple takes 30 per cent of all revenue generated through apps, and 70 per cent goes to the app’s publisher.
The company did send out a press release Thursday outlining the impressive sales number of its apps.
The single biggest day ever in App Store sales history was Jan. 1, 2015 and revenue generated through its App Store rose 50 per cent to a record in 2014. Last year, apps generated over $10 billion (U.S.) in revenue for developers, raising the cumulative total to over $25 billion over the app store’s lifetime. As well, the company touted its job creation numbers, saying the iOS ecosystem has helped create 627,000 jobs in the U.S. over the past six years.
With files from Canadian Press.