Apple changes iTunes prices…in the wrong direction
For the first time in as long as I can remember, Apple has changed prices in certain international iTunes stores. The price change affects everything from apps and in-app purchases to music, and the price change differs depending on the country. In Australia, the price has gone down, while the UK has seen a price increase. My home country of Norway has also seen an increase. In Australia, the lowest app price has changed from $1.19 AUD to $.99. In the UK, the change is £0.59 to £0.69, and in Norway from 6 NOK to 7 NOK. On the top end, £59.99 in the UK is now £69.99 and in Norway the difference is a whopping 549 vs 700 NOK. Both those are $99.99 apps/purchases in the US.
The problem with all of this is that the price change doesn’t really make sense. Here in Norway, $1 used to be 6+NOK and so the 6 NOK price was rather spot on. Now however it’s down to 5.50NOK and sometimes drop even lower, meaning that the Norwegian Krone is a lot stronger than the USD than it used to be. This however means that Apple gets more dollars per NOK, not less, meaning that they should actually have lowered the price (or kept it the same), not raised it. It’s therefore likely that Apple is also taking buying power into account, as US salaries are a lot lower than in Europe and the close to 1:1 conversion that has been in use up until now was never makroeconomically balanced.
Even so, this is a very stupid move by Apple and something that will hurt developers of high priced apps dearly. While I doubt many will think twice about paying 7 NOK instead of 6, they will definitely think twice about paying 700 instead of 549. This means that the higher the app price, the more it will affect the decision making process. If 1/5 people now refrains from buying a $100 price point app in Norway because of the price change, the developer of that app will lose money. Considering the fact we’re talking about a 27% price increase in a country where the average price increase is 2.5% per year, I think it’s safe to assume that the price increase won’t be ignored. Especially considering the fact that digital goods and electronics tend to become cheaper in time, not more expensive.
All in all, Apple has really out-failed themselves this time. I sincerely hope this ends up costing them a lot of money. I also wouldn’t be surprised if European consumer agencies ends up looking into the changes due to the lack of notice.
