price bump

Apple raises minimum app prices in Europe, UK, and Canada

As Apple promised earlier this week, minimum prices in the iOS app store have increased in Canada, the U.K. and European countries that use the euro.

The minimum app price is now €0.99 in the EU, £0.79 in the U.K, and $1.19 in Canada.

According to an email sent by [company]Apple[/company] to developers and obtained by Apple Insider, these changes were caused by “adjustments in value-added tax (VAT) and foreign exchange rates.” Sure, a change in EU tax policy that went on effect on January 1st requires companies to change how they collect VAT tax on digital goods (although the new rules were agreed to in 2008). But I suspect a bigger driving force behind this price bump is that the dollar is at a nine-year high against the euro.

Apple doesn’t set prices on the App Store, but instead allows its developers to pick from a range of pricing tiers.

The email from Apple mentioned that app prices will “decrease in Iceland and change in Russia.” Apple simply suspended its Russian online store — which sells hardware, not apps — in December as the ruble plunged against the dollar. It later came back online with significantly raised prices.

Yesterday, Apple bragged that it had paid out over $10 billion to developers in 2014. But in Apple’s most recent quarterly earnings call, CFO Luca Maestri warned that the strong dollar could affect Apple’s performance over the coming quarters as its products effectively become more expensive in non-U.S. markets.

“The U.S. dollar has strengthened quite significantly against most currencies in recent weeks,” Maestri said on October 20. “It is becoming a significant headwind in Q1.”

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