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Australia Software The Almighty Buck Apple

Australians Set To Pay 50% More For Apps After Apple Price Spike (heraldsun.com.au) 117

Posted by samzenpus from the more-money dept.
SlappingOysters writes: Within 36-hours the price of Apple apps is set to increase in Australia, Sweden and Indonesia. It will bring the price of buying an app out of alignment with the value of the Australian dollar, and leave the country's Apple fans paying 50% more for their iOS software than their American counterparts. It's unfortunate timing, with the recent launch of the iPhone 6s and the upcoming fourth generation of Apple TV.
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Australians Set To Pay 50% More For Apps After Apple Price Spike More

Australians Set To Pay 50% More For Apps After Apple Price Spike

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  • Those photons are heavy.

    • Re: (Score:2)

      by Ecuador ( 740021 )

      Haha funny guy, because photons have little or no mass. But they are probably using electrons, did you think about that? And electrons are much much much heavier than photons!

      • Re: (Score:1)

        by Anonymous Coward

        A little known secret about electrons is that they are rarely shipped from A to B. Most people who charge for electrons actually only move them a little back and forth. Photons on the other hand are typically created at one end and consumed at the other end. Personally I think that it's the interfacing cost. American photons get disoriented when they cross the equator and gravity flips upside down.

        • A little known secret about electrons is that they are rarely shipped from A to B.

          That's because they're really hard to get through customs. I recently ordered a shipment of electrons in convenient 18x65mm cylindrical form from the Golden Phoenix 10,000 Years Happy Luck battery factory (you know that's got to be a good brand) and it was blocked from being shipped by air, some nonsense about "vent with flame" which I'm sure is just anti-Chinese protectionism.

        • ...charge for electrons...

          ha ha ha... as if electrons are ever free of charge... very funny

      • You're both wrong. It's the containers full of ones and zeros that cause the weight...
      • It seems as though much of the traffic into Australia is via fiber optic submarine cables such as the Southern Cross Cable (3.6 Tbits/sec), but I don't know how this compares to the amount of data shipped in via electron oscillations.

    • Re:Must Be The Shipping Cost (Score:4, Interesting)

      by AmiMoJo ( 196126 ) on Tuesday October 13, 2015 @07:03AM (#50716473) Homepage Journal

      Don't forget the cost of translating into Australian.

      This is another reason why it's good to be in the EU. Digital goods must be priced the same everywhere, and soon artificial regional restrictions will be removed so someone in the UK can buy apps on a Polish app store if they want to, and the developer must allow it. Should force the price of video games down a fair bit, for a start, and break the monopoly satellite TV channels have on certain sporting events.

      Maybe Australia should just ban regional locks and require that digital goods be priced within say 5% of the US/EU price. Or maybe apply to join the EU.

      • Re:Must Be The Shipping Cost (Score:5, Funny)

        by PolygamousRanchKid ( 1290638 ) on Tuesday October 13, 2015 @07:25AM (#50716569)

        Maybe Australia should just ban regional locks and require that digital goods be priced within say 5% of the US/EU price. Or maybe apply to join the EU.

        Yeah, but the price of joining the EU has just gone up . . . you need to take in a million Syrians to join the EU. But, hey, Australia has plenty of room in the outback. And, although Australia is infested with lots of poisonous toxic critters and varmints, it can't be worse than in Syria.

        • Re:Must Be The Shipping Cost (Score:4, Interesting)

          by AmiMoJo ( 196126 ) on Tuesday October 13, 2015 @08:01AM (#50716755) Homepage Journal

          Australia would probably benefit from an influx of skilled people. It's got the space, and it does try to attract the "right" kind of immigrants with skills it wants. The problem is that Syrians are mostly Muslims, and there is a perceived culture clash. Actually Syrians are quite progressive, relatively speaking, which is why they are fleeing the hard core old-school guys from ISIS.

          It's a hard sell to people who have Pavolvian conditioning to instantly feel fear and panic when they hear words like "Islam".

          • Re:Must Be The Shipping Cost (Score:5, Informative)

            by quenda ( 644621 ) on Tuesday October 13, 2015 @10:05AM (#50717675)

            Australia would probably benefit from an influx of skilled people. It's got the space,

            Australia may have space, but the immigrants all flock to Sydney, which most certainly does _not_ have space. Its now impossible to buy a decent family home within cooee of the city for under a million dollars. Other major cities are not much better. None of the immigrants want to go to Woopwoop, Tasmania.

          • Triggered!!!

          • Re: (Score:1)

            by Anonymous Coward

            Despite having less than 1/10th the population, Australia plans to take in 12,000 refugees from Syria this year vs USA's 10,000 - and with fewer restrictions.

      • Maybe Australia should just ban regional locks and require that digital goods be priced within say 5% of the US/EU price.

        Australia (or at least John Howard, Bush's antipodean doormat) signed the AUSFTA, a sort of dry run for the TPP. Australia is pretty much at the mercy of US business interests here, they don't have much choice.

      • Don't forget the cost of translating into Australian.

        Well, they only have one vowel...

      • us 99c = AUD 1.36 at todays rate. Australia, like most countries, includes tax in the quoted price, so add 10% tax to get $1.49 . The only surprise here is that Apple actually collects and pays the tax.

      • Or maybe apply to join the EU.

        Australia is already in the EU. Throw a couple of Motzart Kugle on the barbie and fetch a cold Stiegl while you're at it, mate!

      • Re: (Score:2)

        by mjwx ( 966435 )

        Maybe Australia should just ban regional locks and require that digital goods be priced within say 5% of the US/EU price.

        Well that would actually be downright illegal.

        However, we've done the next best thing, grey importing is perfectly legal. This is why I buy most of my games and media from overseas. There are entire businesses like Kogan which are set up to drop ship items from other countries to Australian consumers and even brick and mortar retailers like JB Hi-Fi have gotten in on the game, bypass

      • This is another reason why it's good to be in the EU. Digital goods must be priced the same everywhere, and soon artificial regional restrictions will be removed

        On the other hand, being EU member nowadays means austerity policies that kill jobs and raise debts. If you are in the unlucky batch, in the end you have good product prices but no money in your pocket to buy it.

      • That EU law won't really matter. Easy enough to setup a shop outside the EU and charge what you like to people in the EU.

        That is what is coming...it's easy for virtual stuff like this.

    • Re: (Score:1)

      by Anonymous Coward

      I named my cat Neutron because he's always so positive.

    • They're actually electronics and photons but anyway, I can't see a logical reason that the price is higher. Back in the day it was books and other shipped goods so it made sense to add to the price just for their country. Now I think people are just doing it because they truly hate Australia and everyone there is used to paying more.

    • Re: (Score:2)

      by antdude ( 79039 )

      "This is heavy."

  • Whoa, this is going to cost them! Oh wait, the App Store prices have hit rock bottom for a couple of years now, so I guess this is not going to cost them hardly anything at all.

    Disclaimer: I'm an iOS developer who does barely anything in the App Store. Instead, I develop for clients who at least pay me decently.

    • But how do your clients get your apps if it's not there in the store? Neither iPads nor iPhones have any SD slots or any way to access hard drives

      • Re:This is going to cost them (Score:5, Informative)

        by SQLGuru ( 980662 ) on Tuesday October 13, 2015 @07:20AM (#50716549) Homepage Journal

        It's actually possible to self host a corporate app store. The apps expire once per year, but it's a lot less restrictive. I've worked on a self-updating iOS app for a client that they self host for their internal workers. Even though the app self updates, they still have to uninstall version-N and install version-N+1 each new calendar year.

        • Is the re-install just required for employee-owned devices? I thought it was more transparent, at least for company devices.

        • Re: (Score:2)

          by afidel ( 530433 )

          Or you just use MDM and push the new package before the old one has expired, if you don't change the icon nobody knows unless they happen to catch it when it's updating.

        • Re: (Score:2)

          by guruevi ( 827432 )

          I assume that company has never heard of an MDM. With proper deployment tools, the employees never have to worry about installing any apps.

      • Like SQLGuru below answered, the client I'm working for is a big national airliner in Europe. They have their own enterprise App Store.

      • Even if they are in the app-store doesn't mean they cost. Many or most are free downloads.

    • Funny... So why the price for the US-based users is still the same?

      • Re: (Score:2)

        by tepples ( 727027 )

        Because Apple is a U.S. corporation, and AAPL's price is denominated in U.S. Dollars.

  • I have an iPhone 5s from work, and one of the benefits of these devices having so little storage coupled with the bloating of applications in the last couple of years is that is that it's just too much of a pain in the arse to install a new app. There is very little to entice me to spend money on the app store. ;)

    Now I just wish all those websites that try to push you to their pointless app would stop interrupting my browsing.

  • They were just holding off until after the TPP was signed.

  • "out of alignment with the value of the Australian dollar,"

    Sounds like Apple disagrees.

  • Core Math at it again... (Score:5, Informative)

    by Ronin Developer ( 67677 ) on Tuesday October 13, 2015 @08:37AM (#50716929)

    The title of the parent post is totally misleading and shows a clear sign of not having passed basic algebra. Australians are going to pay 15% more for their apps and not 50%.

    First $1 AU = 0.70 US. Taking currency conversion into consideration, this means that a 0.99 App in the US store would cost $1.29 AU.
    Next, we see that that $1.29 apps are being raised to $1.49. That's a $0.20 AU or a 15% price hike.

    Converting that back to US, we see that the equivalent cost is $1.09 US vs the original $0.99 US. This $0.10 US difference equates to an actual 10% markup between the AU and the US markets.

    I would have to assume that Apple is passing on their operational overhead costs in the pricing of apps.

    Something to think about - developers are permitted to set the price of their apps. In the US, other than free, the minimum cost is $0.99 as that is the lowest tier that Apple permits. Should developers be forced to take a pay cut because they are selling in a market with a poor currency exchange rate or should they be permitted to sell their wares at a specific price they deem appropriate?

    Given that Apple is going to reintroduce a $0.99 tier in those markets, should developers be expected to sell their apps at a 30% discount in the US as well? After the Apple tax of 30% on goods sold in the store, the developer makes a $0.50 on an item they originally sold for $0.99. Is that fair?

    If developers are willing to take such a hit on their profits at the benefit of maybe selling more at the lower price and gaining a PR boost, then we will see them moving to the $0.99 plan in those poorer performing markets.

    • Re: (Score:2, Informative)

      by Anonymous Coward

      Don't forget the 10% GST is included in the price in Oz.

    • Maybe I'm missing something, but at 1 AUD = 0.70 USD, wouldn't 0.99 USD = 1.41 AUD (.99/.7~=1.41)? At that exchange rate, a 1.29 AUD app would be 0.90 USD. So the 1.49 is actually only a 4.3% markup over the equivalent USD price.

      If you look at the chart in the second link, you can see that if the AUD and USD are at parity, the old AUD price markup over USD ranged from 22% to 30%, but at $1 AU = $0.70 US, the markup of the new prices ranges from about 4% to 17%, which actually is closer to equivalent. Suc

    • You know, there is this thing called a price curve. At $0.99 you sell 10,000 copies of your cool game,
      at $0.79 you sell 20,000 copies, or maybe only 5,000. The price of a game does effect how many copies
      you sell, so just blindly assuming that developers "take a hit on their profit" because the price goes down
      to $0.79 is a very simplistic view.

      • actually it is called a demand curve.... :\

      • I alluded to this in my last statement. Determining the proper selling price for a market is very much a science as well as trial and error. Sales teams go to great lengths to determine the proper selling prices.

        The bottom line is that at the current exchange rates, a developer selling in the lesser performing markets is taking the equivalent of twice the Apple Tax. As I noted, the developer sells their ware at $0.99 in the US. They see only 70% of that income. Given that the AUD's exchange rate is .7,

    • You missed one thing from your insightful post. The price of the AUD has plummeted. It was only the start of the year where 1AUD = 1.1USD. Increasing the price was simply a response to the fluctuation of the currency.

    • Agree. Our consumer cops are anything but toothless tigers. If the headline were true the ACCC would drag Apple into court, again.

      Aussies are accustomed to the dollar going up and down, our reserve bank tries to dampen the swings and keep it under parity. Recently our dollar has been high (GFC safe harbour + mining boom), good for importers, bad for exporters. The GFC is over and so is the mining boom, the exchange rate is now coming back to its normal rate (historically speaking). It's a tough balancing

  • Unlike in the US where taxes are separate, GST (10%) is included in the app store price.

    $0.99 US pre-tax + 10% GST = $1.089 US post-tax

    currently $1 US = 1.3713 AUD

    so $1.089 US = 1.4933457 AUD
    So Aussies are in fact getting a $0.0033457 AUD discount over the US.

  • Don't just blame Apple for all this. Blame the Australian government and their protectionist policies that enable companies to take advantage of customers because they have no alternatives.

    Go to Australia and you will see ridiculously priced cars, books, food items, software, tons of other consumer items. All protected from imports in the name of "promoting Australian industry", i.e. protecting them from competition.

    Software licenses that cost 2-3x in the US or 10x in India. And books? Are yo

    • Don't just blame Apple for all this. Blame the Australian government and their protectionist policies that enable companies to take advantage of customers because they have no alternatives.

      Horseshit. How about you blame the ideals that you think the price should be exactly the same despite a major change in the value of the dollar. Yes it applies a cost pressure to Australia but at some point Apple decided that a song costs X USD, and when the AUD starts falling against the USD then the cost of the song needs to rise accordingly.

      Protectionist my arse. Why shouldn't a company existing in a free market be able to charge what they want? It's not like you can't get your music from many other sour

      • The GP has a (well hidden) point, price gouging is a problem in Oz, particularly with software and other forms of IP, but it has nothing to do with this story or the exchange rate. Also fresh food is dirt cheap compared to (say) the UK, and we are second only to iceland when it comes to average number of books sold per head of population, so the claim that books are "overpriced" doesn't hold water either.

        Keating threw out protectionism (tariffs), floated the dollar, and gave the lower and middle classes

  • Something that costs $1.49AUD costs $0.98USD, after you take in to account the current exchange rate of 73c per $1AUD and the 10% sales tax included in the $1.49

    The aussie dollar has plummeted against the greenback.
    At the start if the year it was 80c,
    Mid 2014 it was 95c
    From 2011 to 2013 it was around $1.00

    Australians are getting apps for 1% less than Americans.

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