Now, the costs of Apple products will numerically match in the United States and United Kingdom, which means that a program that is priced around $0.99, will now be 99p. This represents a 25% hike over the last currency conversion that was 79p. It said, “Price tiers on the App Store are set internationally on the basis of several factors, including currency exchange rates, business practices, taxes, and the cost of doing business.”
Increase in costs will also affect in-app purchases
The report added that these factors vary from place to place and over time. The hike in costs will affect in-app purchases as well. But the Cupertino-based iPhone maker is introducing new lower-price tiers to alleviate the impact of the increase.
Publishers will now be able to charge users around 49p to 79p for purchases but they will have to re-price their products as well to do so. $1 trades for 82p at present. The price quoted by the tech giant in the UK version of its store, however, includes the 20% VAT sales tax. 9TO5Mac, a news site that covers all Apple-related news was the first site to report about this cost development. The change would take place over the next seven days, said the news site.
After changes to taxation policy and exchange rates in UK, the iPhone maker is raising the prices for apps and in-app purchases in some countries, including UK, Turkey and India. The customers in these countries would see the price hikes. Following the weak pound exchange rate after the Brexit vote, app prices are rising more than 25% in the United Kingdom.
The app that sold for $0.99 in the United States will now cost £0.99 in the United Kingdom, up from £0.79. This is a hike of over 25% and same hikes in costs will be seen at every price tier when the changes hit the App Store in the future. An In-App Purchase that used to cost £7.99 previously will not be priced around £9.99, such as the ‘All Worlds’ upgrade for Super Mario Run. A Tier 2 priced application now costs around £1.99 in the UK, which was £1.49 before.
Price also hiking in Turkey and India
The report by 9TO5 Mac said, “Increases of about 25% are reflected all the way across the pricing matrix for the United Kingdom App Store.” The weak value of pound sterling exchange rate along with 20% VAT rate of UK means that app prices have reached parity with the US numbers now, for instance, a $9.99 app costs £9.99 now.
Now, the cheapest application or in-app purchase in the United Kingdom will be £0.49 if the developers opt to use the alternative price tiers. The Cupertino-based smartphone making giant is notifying developers today with specific reference to the Mac App Store and iOS App Store but it is likely that the similar increases will hit the iTunes Store for books, TV shows, and movies as well.
The latest higher prices will roll out to the App Store over the next seven days, said the tech giant.