Apple responded to the currency fluctuations that happened in the past few years by changing the prices of software apps from Canada to Europe. The change took place last week and it was a very important and calculated move that Apple made in hopes it would regain some control over the prices of their applications as a reaction to currency fluctuations.
Apple has been very reserved in the past in making such currency changes and corrections, but it seems that Apple is determined to do its best not to lose money.
Apple told software makers that had applications for sale in the App Store that it was increasing the app prices in the E.U., Canada, Russia and Norway because of taxes and foreign exchange rates. The new app pricing went into effect last week.
So what does the app pricing change mean? Well, in Europe the basic price app was 0.89 Euro cents and now it is 0.99 Euro cents. In Canada, the basic app price was 99 cents and now is $1.19. Another very important move made by Apple was boosting iPhone prices in Russia in December of 2014 when the ruble plunged. It also halted online sales, which is an unprecedented move.
Application prices are set by ties, Apple doesn’t nothing more than adjust them across the world, translating them into local currency. In Europe, Apple adjusted the app prices in 2012, in Asia in 2014 and never in Canada. It was revealed by Apple last week that revenue generated by sales in the App Store rose by 50% in the first week of the New Year. In 2013, more than $10 billion was spent in the App Store. The company gets the vast majority of its annual revenue from outside the U.S.
The App Store team sent out mails to developers to announce them of the change.
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. 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.
This app pricing change was expected to happen in Europe, because it recently passed new legislation that increased the price of MP3s, eBooks and apps by 6.5% in most of European Union countries. The change went into effect on the first day of 2015 and initially it was believed that the price change would not be felt by consumers, as companies would simply absorb the increase, but it seems that consumers would deal with the price changes.
Almost all world currencies have declined against the U.S. dollar in the past year, mainly because the economy of the States is on an upswing. The Euro has declined about 13% against the U.S. dollar in six months, and the Canadian dollar is at its lowest in the past 5 years when compared to the U.S. dollar.