App Store prices set to increase in United Kingdom, others

AppleInsider

Apple has announced that, due to changes in foreign exchange rates, it will raise prices of both apps and in-app purchases made in several countries starting on February 13.

App Store prices to

The countries that will see price increases include:

• Columbia


• Egypt


• Hungary


• Nigeria


• Norway


• South Africa


• United Kingdom

Apple notes that it periodically updates prices in the App Store to "help ensure prices for apps and inapp purchases stay equalized across all storefronts."

While several countries are seeing price increases, prices in Uzbekistan will decrease to reflect the reduction of the value-added tax rate.

The company also notes that Ireland, Luxembourg, Singapore, and Zimbabwe will not see price increases, but proceeds will be adjusted to reflect local tax changes.

Additionally, proceeds will increase for local developers selling in Cambodia, Kyrgyzstan, Indonesia, Singapore, South Korea, Tajikistan, Thailand, and Uzbekistan.

Apple previously announced that it will provide developers with 900 price points as well as new App Store pricing tools. The change is set to roll out in spring 2023.



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lkrupp

What goes up never comes down in the retail universe.

davidw

lkrupp said:

What goes up never comes down in the retail universe.

Only the price of apps didn't go up. The Apple App Store price their apps in US Dollars, in every country. And each country pays the equivalent in their own currency, based on the exchange rate of their currency. If the exchange rate goes up or down, then the changes in the price of apps (in their country) is reflected in their currency, when Apple makes the correction. But whether they end up paying more or less for the apps in their currency, they are still paying the same equivalent price in US Dollars for the apps. Apple did not raise (or lower) the price of apps in their App Store. The exchange rate between the US Dollar and other currencies, goes up and down daily. But I don't know what criteria Apple sets to determine when the changes are reflected in the Apple App Store pricing in other currencies. But I do know that when the exchange rate is not favorable for Apple, for too long, they report it in their earnings report to explain one of the reasons why earnings or profits might had taken a hit. (Remember, the exchange rate also affects the pricing of Apple hardware, in other countries.)    

timmillea

davidw said:

lkrupp said:

What goes up never comes down in the retail universe.

Only the price of apps didn't go up. The Apple App Store price their apps in US Dollars, in every country. And each country pays the equivalent in their own currency, based on the exchange rate of their currency. If the exchange rate goes up or down, then the changes in the price of apps (in their country) is reflected in their currency, when Apple makes the correction. But whether they end up paying more or less for the apps in their currency, they are still paying the same equivalent price in US Dollars for the apps. Apple did not raise (or lower) the price of apps in their App Store. The exchange rate between the US Dollar and other currencies, goes up and down daily. But I don't know what criteria Apple sets to determine when the changes are reflected in the Apple App Store pricing in other currencies. But I do know that when the exchange rate is not favorable for Apple, for too long, they report it in their earnings report to explain one of the reasons why earnings or profits might had taken a hit. (Remember, the exchange rate also affects the pricing of Apple hardware, in other countries.)    

What naive tosh! It is true that Apple sets prices in $US in the US. Overseas prices are based on the US prices plus local sales taxes plus a hefty margin for exchange rate variability, plus an extra profit margin, then rounded up to the next price point. 

The  example quoted by JP234 of the Mac Mini going from $699 to $599 in the US. That same Mac Mini M2 is £649 in the UK. At the current exchange rate of $1.2395/£ that is $804.43. 

Apple has always charged much higher prices outside of the US. For a high-end Mac, the difference in price will pay for a holiday to the US to buy it. 

Naiyas

timmillea said:   

What naive tosh! It is true that Apple sets prices in $US in the US. Overseas prices are based on the US prices plus local sales taxes plus a hefty margin for exchange rate variability, plus an extra profit margin, then rounded up to the next price point. 

The  example quoted by JP234 of the Mac Mini going from $699 to $599 in the US. That same Mac Mini M2 is £649 in the UK. At the current exchange rate of $1.2395/£ that is $804.43. 

Apple has always charged much higher prices outside of the US. For a high-end Mac, the difference in price will pay for a holiday to the US to buy it. 

Perhaps we should demonstrate the example drawn out above correctly as the comparative being drawn seems to imply that there is over $200 of additional profit on the UK price when it’s no where near that.

Base cost of mini: $599

This price includes no sales tax in the US. When the product comes to the UK pricing includes sales tax, but it also includes import duties. So what are these?

Import duty: ~10% adds ~$59.90

VAT: 20% on base cost AND duty adds $131.78

So the “real consumer price” is actually ~$790.68

Converting this to UK currency at the rate above we get a UK price of £637.90.

The round up to the price point of £649 gives an additional margin of just over £11 in this case, so one can reasonably argue that the so called price gauging overseas is not as bad as first implied. The real issue is the duties and taxes that are added and go straight to the UK government.

We also need to remember overseas that the US price is not the real price paid as sales taxes get added, but this varies greatly depending on where in the US you buy (and use, technically) the item.

elijahg

Naiyas said:

timmillea said:   

What naive tosh! It is true that Apple sets prices in $US in the US. Overseas prices are based on the US prices plus local sales taxes plus a hefty margin for exchange rate variability, plus an extra profit margin, then rounded up to the next price point. 

The  example quoted by JP234 of the Mac Mini going from $699 to $599 in the US. That same Mac Mini M2 is £649 in the UK. At the current exchange rate of $1.2395/£ that is $804.43. 

Apple has always charged much higher prices outside of the US. For a high-end Mac, the difference in price will pay for a holiday to the US to buy it. 

Perhaps we should demonstrate the example drawn out above correctly as the comparative being drawn seems to imply that there is over $200 of additional profit on the UK price when it’s no where near that.

Base cost of mini: $599

This price includes no sales tax in the US. When the product comes to the UK pricing includes sales tax, but it also includes import duties. So what are these?

Import duty: ~10% adds ~$59.90

VAT: 20% on base cost AND duty adds $131.78

So the “real consumer price” is actually ~$790.68

Converting this to UK currency at the rate above we get a UK price of £637.90.

The round up to the price point of £649 gives an additional margin of just over £11 in this case, so one can reasonably argue that the so called price gauging overseas is not as bad as first implied. The real issue is the duties and taxes that are added and go straight to the UK government.

We also need to remember overseas that the US price is not the real price paid as sales taxes get added, but this varies greatly depending on where in the US you buy (and use, technically) the item.

Whilst this is true, there have been plenty of times whereby that extra margin as a percentage is in the high teens. That and as Lkrupp rightly (???) said, "What goes up never comes down". As far as I'm aware, Apple has rarely (if ever?) corrected the foreign prices downwards in response to exchange rate fluctuations, only ever up.

davidw

elijahg said:

Naiyas said:

timmillea said:   

What naive tosh! It is true that Apple sets prices in $US in the US. Overseas prices are based on the US prices plus local sales taxes plus a hefty margin for exchange rate variability, plus an extra profit margin, then rounded up to the next price point. 

The  example quoted by JP234 of the Mac Mini going from $699 to $599 in the US. That same Mac Mini M2 is £649 in the UK. At the current exchange rate of $1.2395/£ that is $804.43. 

Apple has always charged much higher prices outside of the US. For a high-end Mac, the difference in price will pay for a holiday to the US to buy it. 

Perhaps we should demonstrate the example drawn out above correctly as the comparative being drawn seems to imply that there is over $200 of additional profit on the UK price when it’s no where near that.

Base cost of mini: $599

This price includes no sales tax in the US. When the product comes to the UK pricing includes sales tax, but it also includes import duties. So what are these?

Import duty: ~10% adds ~$59.90

VAT: 20% on base cost AND duty adds $131.78

So the “real consumer price” is actually ~$790.68

Converting this to UK currency at the rate above we get a UK price of £637.90.

The round up to the price point of £649 gives an additional margin of just over £11 in this case, so one can reasonably argue that the so called price gauging overseas is not as bad as first implied. The real issue is the duties and taxes that are added and go straight to the UK government.

We also need to remember overseas that the US price is not the real price paid as sales taxes get added, but this varies greatly depending on where in the US you buy (and use, technically) the item.

Whilst this is true, there have been plenty of times whereby that extra margin as a percentage is in the high teens. That and as Lkrupp rightly (???) said, "What goes up never comes down". As far as I'm aware, Apple has rarely (if ever?) corrected the foreign prices downwards in response to exchange rate fluctuations, only ever up.

https://www.purchasely.com/blog/app-store-prices-decrease-in-all-territories-that-use-euro-currency

https://www.reuters.com/article/us-apple-iphone-prices/apple-lowers-some-iphone-prices-outside-u-s-to-offset-strong-dollar-idUSKCN1PO06G

fred1

Naiyas said:

timmillea said:   

What naive tosh! It is true that Apple sets prices in $US in the US. Overseas prices are based on the US prices plus local sales taxes plus a hefty margin for exchange rate variability, plus an extra profit margin, then rounded up to the next price point. 

The  example quoted by JP234 of the Mac Mini going from $699 to $599 in the US. That same Mac Mini M2 is £649 in the UK. At the current exchange rate of $1.2395/£ that is $804.43. 

Apple has always charged much higher prices outside of the US. For a high-end Mac, the difference in price will pay for a holiday to the US to buy it. 

Perhaps we should demonstrate the example drawn out above correctly as the comparative being drawn seems to imply that there is over $200 of additional profit on the UK price when it’s no where near that.

Base cost of mini: $599

This price includes no sales tax in the US. When the product comes to the UK pricing includes sales tax, but it also includes import duties. So what are these?

Import duty: ~10% adds ~$59.90

VAT: 20% on base cost AND duty adds $131.78

So the “real consumer price” is actually ~$790.68

Converting this to UK currency at the rate above we get a UK price of £637.90.

The round up to the price point of £649 gives an additional margin of just over £11 in this case, so one can reasonably argue that the so called price gauging overseas is not as bad as first implied. The real issue is the duties and taxes that are added and go straight to the UK government.

We also need to remember overseas that the US price is not the real price paid as sales taxes get added, but this varies greatly depending on where in the US you buy (and use, technically) the item.

Thank you. It’s always the same discussion. Prices seem much higher outside the US for this reason.
I, for example, can buy Apple products for a bit less here than in the US because I can claim them as a business expense and be reimbursed for the VAT (it’s actually credited against the VAT that people pay me for my work).  

racerhomie3

I cannot wait for the new App Store price points to be released. The services will have more affordable options

Naiyas

elijahg said:

Whilst this is true, there have been plenty of times whereby that extra margin as a percentage is in the high teens. That and as Lkrupp rightly (???) said, "What goes up never comes down". As far as I'm aware, Apple has rarely (if ever?) corrected the foreign prices downwards in response to exchange rate fluctuations, only ever up.

The margin will clearly go up and down as the exchange rate fluctuates, just like all prices have the appearance of doing so when you are trying to compare across currencies. This is nothing new and is the normal course of things, hence why there are currency traders, currency hedges, etc. I recall, pre-Euro, going to Spain for holidays, we'd buy our pesetas in the winter as we'd get 250 to the pound vs in the summer where we would get 150 to the pound (costing us 40% less for the same amount of pesetas).

Whilst I also don't recall a time that Apple prices have dropped in the last 15 years related to this, it is also true that the pound to dollar exchange rate has also fallen over that time so there is unlikely to have been a time that a price correction would have gone the other way in this period.

fred1 said:

Thank you. It’s always the same discussion. Prices seem much higher outside the US for this reason.
I, for example, can buy Apple products for a bit less here than in the US because I can claim them as a business expense and be reimbursed for the VAT (it’s actually credited against the VAT that people pay me for my work).  

I'm also in this position as I run my own business which partially zero rated for supply so full VAT recovery. We're still stuck with ~10% import duty and currency fluctuation, but it's not as bad as it seems at first glance for this reason. I have, previously, been a little naughty in that I've taken advantage of the fluctuation and high value purchase to use it as a way to justify a flight to the US for a holiday - the savings on buying in the US vs the UK effectively covers the price of the flight and hotel for a week or two - selling my old computer while there and coming back with a new one - been over 10 years since that kind of difference was workable though, but with the recent price rises it may be possible again soon.

timmillea

Naiyas said:

timmillea said:   

What naive tosh! It is true that Apple sets prices in $US in the US. Overseas prices are based on the US prices plus local sales taxes plus a hefty margin for exchange rate variability, plus an extra profit margin, then rounded up to the next price point. 

The  example quoted by JP234 of the Mac Mini going from $699 to $599 in the US. That same Mac Mini M2 is £649 in the UK. At the current exchange rate of $1.2395/£ that is $804.43. 

Apple has always charged much higher prices outside of the US. For a high-end Mac, the difference in price will pay for a holiday to the US to buy it. 

Perhaps we should demonstrate the example drawn out above correctly as the comparative being drawn seems to imply that there is over $200 of additional profit on the UK price when it’s no where near that.

Base cost of mini: $599

This price includes no sales tax in the US. When the product comes to the UK pricing includes sales tax, but it also includes import duties. So what are these?

Import duty: ~10% adds ~$59.90

VAT: 20% on base cost AND duty adds $131.78

So the “real consumer price” is actually ~$790.68

Converting this to UK currency at the rate above we get a UK price of £637.90.

The round up to the price point of £649 gives an additional margin of just over £11 in this case, so one can reasonably argue that the so called price gauging overseas is not as bad as first implied. The real issue is the duties and taxes that are added and go straight to the UK government.

We also need to remember overseas that the US price is not the real price paid as sales taxes get added, but this varies greatly depending on where in the US you buy (and use, technically) the item.

1) The UK has a VAT (sales tax) rate of 20% on import but no other import duties on computers (i.e. not the imaginary 10% in the worked example). 
2) The post appears to imply that Macs are made in the US and not imported there! When I am one of the first buyers of a new Mac model, I receive the tracking information from China to my door - ahead of the container ships bringing in the same products. I imagine, given the current US-China climate, that the US, unlike the UK, does have import duties for computers imported from China - making the price differential even more egregious.