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EU Software United Kingdom The Almighty Buck Apple Technology

Apple Increases App Store Prices By 25% Following Brexit Vote (theguardian.com) 172

Following the UK's vote to leave the European Union last year, Apple is raising prices on its UK App Store by almost 25 percent to counter the depreciation of the pound. For example, an app that costs $0.99 in the U.S., and used to cost 0.79 British pounds, will now cost 0.99 British pounds. The Guardian reports: Apple announced the price rises in an email to app developers on Tuesday, and told them "when foreign exchange rates or taxation changes, we sometimes need to update prices on the App Store." It says the new prices will roll out over the next seven days, giving customers a short opportunity to beat the price increase. Similar price increases are expected to hit other Apple stores, including the iTunes Store for music and video and the iBooks Store. Britain isn't the only country experiencing price changes. India is seeing price increases due to changes in service taxes, while Turkish prices are also rising due to depreciation of the Turkish Lira. Since the vote to leave the European Union, the value of the pound has fallen by 18.5% against the U.S. dollar. In a statement, Apple 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. These factors vary from region to region and over time."
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Apple Increases App Store Prices By 25% Following Brexit Vote

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  • by Anonymous Coward

    The dollar is doing well. it would be much more honest to compare the pound to the euro in that not so subtle piece of advocacy.

    • What? You think this is about sending a political message or some greedy cash grab by Apple? Well, as you say the dollar is doing very well. If it was just politics or a cash grab then Apple would not be cutting app store prices in the U.S. to reflect the growing value of the dollar.

      Oh, I see your point!

  • by xushi ( 740195 )

    What about In App Purchases. Will those rise too?

    • by msauve ( 701917 )
      I thought Apple was only renting space to developers [slashdot.org], and got a fixed percentage from them. Isn't setting/raising prices something developer's should decide to do? Or are things somehow different in the UK?

      (yes, I know the other article was about a court case in the US)
      • by dgatwood ( 11270 )

        I thought Apple was only renting space to developers [slashdot.org], and got a fixed percentage from them. Isn't setting/raising prices something developer's should decide to do? Or are things somehow different in the UK?

        Basically, when you sell something in any of Apple's stores, you choose a price tier in your default currency, and prices in other currencies are based on that price combined with the current exchange rates. For example, if I create a book right now, and specify tier 10 everywhere, that's

    • Yes. All Apple purchases are expressed in units, approximately equal to a dollar. IAPs and app prices both. These units are then translated into local currencies as Apple feels most appropriate.

  • Despite the USD being up and the GBP being down, at the time of this writing, 1 USD stands at 0.8 GBP. What's wrong with doing a fair conversion, Apple?
    • Minus 20% VAT (Score:4, Informative)

      by raymorris ( 2726007 ) on Wednesday January 18, 2017 @08:47PM (#53693355) Journal

      1 GBP - 20% VAT = 0.8GBP = 1USD

      Apple and the developer get the same amount of money in each country. In GB, you also pay the government too.

      • by raymorris ( 2726007 ) on Wednesday January 18, 2017 @08:55PM (#53693393) Journal

        I should clarify my comment, on some purchases, for customers in some states, the company adds tax, generally around 8%. So US customers pay 99 cents PLUS tax.

        When the company collects VAT, it's INCLUDED in the sticker price - it's illegal in the UK, I understand, to show customers who they are really paying by listing it as "+0.80 purchase price plus VAT".

        Anyway, after the currency conversion, the company is charging the same amount. The extra that UK customers pay is the government charging higher taxes.

        • I should clarify my comment, on some purchases, for customers in some states, the company adds tax, generally around 8%. So US customers pay 99 cents PLUS tax.

          When the company collects VAT, it's INCLUDED in the sticker price - it's illegal in the UK, I understand, to show customers who they are really paying by listing it as "+0.80 purchase price plus VAT".

          Anyway, after the currency conversion, the company is charging the same amount. The extra that UK customers pay is the government charging higher taxes.

          Yes, you are right. But don't you think it's interesting that historically Apple products have cost more in the UK than in the US even after taking VAT into account. And why when the pound hit $2 in 2007 and 2008 didn't it lower prices? It seems that currency moves only cause Apply to raise prices, not to lower them.

          • > But don't you think it's interesting that historically Apple products have cost more in the UK than in the US even after taking VAT into account.

            Not really, at least not "interesting" in any kind of mysterious way. Transportation costs are different, taxes are higher in the UK, etc. Since the US tax structure is different from every other country, technically Apple is supposed to pay taxes on UK revenue in both the UK AND the US. So just The tax differences alone could easily make a 10% difference

          • Historically, over about the past decade up until the pound took a bath following the Brexit vote, Apple have charged very close to the same amount for their products in the UK as in the USA, once one takes VAT into account. The difference for most products has usually been within a few percentage points. Admittedly for some products the difference has been larger, but for their more expensive items the prices have tended to be close.

            Occasionally currency fluctuations have meant that some Apple products h

        • When the company collects VAT, it's INCLUDED in the sticker price - it's illegal in the UK, I understand, to show customers who they are really paying by listing it as "+0.80 purchase price plus VAT".

          It's not illegal to show the price before VAT in the UK. However, for goods aimed at consumers, the price you pay at the till (including any applicable taxes) must be the most prominently displayed price. My understanding is it's the opposite in the US, where it's common not to show customers how much they will be paying, by not including taxes, mail in rebates, service charges, etc. That seems bizarre to me.

      • The problem is that this seems to be corporate policy, which is notoriously slow to change. Currency markets, on the other hand, are extraordinarily fast paced, and typically open 24 hours a day. The USD rally will not continue, and similarly, the GBP depression won't either. Once these corrections take place, what then? Is Apple going to revise their policy once more?

        The only fair way to handle this is by doing a proper currency exchange at fair market values, then adding appropriate fees and taxes. Anyt
        • The USD rally will not continue, and similarly, the GBP depression won't either. Once these corrections take place, what then? Is Apple going to revise their policy once more?

          Even supposing your calculations are prophetic, not pathetic, I think the safe money's on a slower response to negative price evaluation.

          • Even if my predictions are wrong (which I doubt, given how general they are), the core of my statement remains true: currencies are volatile and subject to sudden movements. This is not the type of thing that can be accurately captured in corporate policies, and anybody with the slightest exposure to Forex knows this.

            Apple is arrogant for not doing proper currency conversion.
            • There are two issues at play here. It might be interesting to do an a-b specifically for prices that change day to day versus that magic 0.99 price point which has been tested and proven over and over again.

              Not having done forex, my guess is that *most* of the time, the major currencies would drift within a few percentage points of each other week to week, so sticking with 0.99 would work better than 1.02 one day, 1.01 the next, then 0.98. 1 is psychological cut-off, going above that reduces sales.

              I would f

              • Not having done forex, my guess is that *most* of the time, the major currencies would drift within a few percentage points of each other week to week, so sticking with 0.99 would work better than 1.02 one day, 1.01 the next, then 0.98. 1 is psychological cut-off, going above that reduces sales.

                If it was that simple, I'd be a Forex millionaire by now, as would many others, since buying each dip would be a viable strategy. Unfortunately (or fortunately, since I didn't go broke), I ultimately threw out about 6 months of development into a complex algorithmic trading system that targeted Forex. Bear in mind I did that as somebody that's not afraid to take risks; unfortunately, currency pairs swing wildly, even when no geopolitical events can be easily attributed to the fluctuations.

                To get an idea,

        • Is that an honest question? Because you can safely assume that Apple's policy will reflect whatever makes them the most money, as risk-free as possible.

          • Of course not. They were rhetorical questions intended to highlight what I believe to be a dishonest business practice. Maybe I'm an idealogue, but I do know it's possible to run a business without resorting to such practices.
        • > Once these corrections take place, what then? Is Apple going to revise their policy once more?

          That'll depend on what else has happened and is expected to happen, assuming Apple prices according to established best practice.

          Typically, when the price is highly visible to the consumer, certain price points work best: 0.99, 1.49, etc. You don't price an app or a hamburger at 1.82. To achieve that, you "bundle" your price increases. You don't increase the price by 4% because X, then later increase it 2%

          • Regarding this:

            Typically, when the price is highly visible to the consumer, certain price points work best: 0.99, 1.49, etc. You don't price an app or a hamburger at 1.82. To achieve that, you "bundle" your price increases.

            A similar aesthetic could be achieved by showing the attractive USD price, and the converted price in a smaller font, or even on a different page/view/whatever (although that's kind of shitty). I've seen this approach in a few places.

        • by Dog-Cow ( 21281 )

          I regularly receive emails from Apple, alerting me to the fact that they adjusted prices in various markets. So yes, Apple regularly assesses currency valuations and makes adjustments.

          • This article made it seem as if they were infrequent enough to be newsworthy, so that's good to hear. Still, they're not as fast currency markets, and this approach is a great way to scalp nations if Apple chooses to do so. In my experience, most companies don't do this, even though their conversion rates tend to be less-than-stellar.
      • Technicality, but VAT is 20% of the original price.

        So 1GBP is 83p ex VAT

        • by Malc ( 1751 )

          That's not a technicality; it's basic maths.

          Wrong:
          x + 20% != y - 20%

          Right:
          x*1.2 == y / 1.2

  • by rsilvergun ( 571051 ) on Wednesday January 18, 2017 @08:52PM (#53693379)
    but I can't imagine the folks who voted Brexit care. Apps, especially paid ones, are mostly a young person thing. As an old codger I've yet to pay for anything on my phone. Now, as a _reasonable_ old codger here in the colonies my heart goes out to those young people who just got driven off a cliff by Grandpa and Grandma. Sure, it's their fault for staying home on election day (just like Trump's our young folks fault for the exact same reason) but just like Trump nobody deserves what's to come.
    • by guruevi ( 827432 )

      The market doesn't care about Brexit in the long term. If you look at the value of the GBP, EUR and USD over the last decade, there are gains and dips, Brexit vote barely brought a noticeable dip on the longer timescales. And you can tie any number of events to the dropping and rising of a currency, whatever fits your narrative. The USD has flatlined over the last 10 years, the only reason the USD is 'better' right now is because it has been able to inflate a bubble by keeping the low interest rate that was

    • Re: (Score:3, Flamebait)

      by clonehappy ( 655530 )

      God damn, is everything Doom and Gloom with you people? Apple unashamedly politicizes a price hike disguised as equality (gotta keep things "fair" right?), and your ilk uses it as an excuse to play the blame game against populists who look out for their own interests before the interests of foreigners. Real cute.

      Wanna know what else? I know more young people that voted for Trump than old codgers. You must have missed how the shitposting internet memers got Trump elected. The geriatrics sitting at home all d

      • by account_deleted ( 4530225 ) on Wednesday January 18, 2017 @09:49PM (#53693667)
        Comment removed based on user account deletion
        • by Malc ( 1751 )

          More like a case of STDs after a night with a skanky prostitute.

        • by AmiMoJo ( 196126 )

          In the case of Brexit we might still be able to avert total disaster. If we can somehow sabotage it, or bring the government down, there is a chance we can salvage something.

          Unfortunately it's a slim chance and a lot of people are looking at simply leaving now. Even if Brexit were averted, it's shown up the reality of commonplace bigotry and xenophobia in the UK.

      • elected Trump. The 538 blog has a meticulously sourced article on it. Hilary didn't bother campaigning in the rust belt because she took them for granted (she always was an arrogant bitch) so they stayed home. It took a lot of other stuff (DNC hack, that assclown FBI director's Oct Surprise, Russian propaganda campaigns) but those were surmountable had Hilary fought in the swing states like she should have.

        You're gonna get Globalism whether you like it or not. It benefits your ruling class, and you're i
      • by Kiuas ( 1084567 )

        Apple unashamedly politicizes a price hike disguised as equality (gotta keep things "fair" right?)

        I'm no fan of Apple's business practices in general, but this has nothing to do with politicizing anythting. It's a fact that the Pound has weakened after Brexit and keeps weakening. It's also a fact companies don't like their profits being eaten up by exchange-rate fluctuations. They need to make their desired cut on the apps, and it's not their fault that the Pound is falling.

        Sure, if Apple cared about ethi

      • Apple unashamedly politicizes a price hike disguised as equality.

        Um, no. Apple has adjusted prices like this many times and for many years. I know, I have apps in their app store. I get the emails all the time about price adjustments in foreign markets. SLASHDOT is the one politicizing it by saying the change is "After Brexit." It's also after Obama's term, after the dinosaurs went extinct, and after World War II. Chronology is not causation.

  • Really, HAHA
  • The other side of the GBP depreciation: companies that make apps in UK and profit is calculated in GBP, are making more profits in overseas markets. The selling point of currency depreciation is boot to exports at the expense of import consumption. In other words, producers get richer and consumers — poorer. Unless the trickle down economics actually work.

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