Not app-y with VAT: Apple bumps up prices in Blighty, Europe, Canada Apple is enjoying a super-soaraway January: its App Store has cleared nearly half a billion dollars in sales in just the first seven days of the month, we are told. New Year’s Day set the record for the largest number of App Store sales in a 24-hour period, and Apple reports sales in 2014 were up 50 per cent on the previous …
It's more complicated!
Apple , being obviously based in Luxembourg , used to charge & collect VAT at 3% in all the EU for digital goods. Now the Commission has required Apple (& Amazon) charge & collect the local VAT rate at the place where the service is delivered, eg 19% in DE, 22% in IT. LU will receive some billions € in compensation from the EU over the next 3 years, UK chancellor will probably gain £300M/yr!
If that is true, then good. Should be paying taxes locally (looking at all the big companies here). but when you are looking at 69p, the raise really going to be that big?
If you can afford the overpriced fan boi tablet anyway, a few extra pence won't matter?
Do exchange rates make much difference when, because of tax reasons, Apple US leave overseas revenue in the countries that generated it? They do this because if the revenue entered the US in order to get to Apple HQ, Apple would get taxed on it once it entered the US(?) So the revenue stays outside the US, and Apple US have to borrow money from 'the markets' so they can pay their shareholders dividends.
Just askin, like.
Yes, because they use the 99c as a basis, so when the exchange rates fluctuate, they need to put in a conversion, so that the store for each region displays the correct amount - corporates usually work with a fixed internal currency, so that they can calculate sales in different regions.
That is why they stopped selling in Russia, when the Rubel collapsed before Christmas. The products were suddenly worth "nothing" in the Russian stores.
If they tell the developer that he will get 66c from each sale of the 99c app, then the exchange rate fluctuates so wildly that the 64 Flanian Pobble Beads are now only worth 50c, then Apple will be making a loss of 16c per sale, not to mention their 33c profit...
"It was also a good Christmas season for the Bono-founded RED campaign, which raises money to fight AIDS. In November Apple set up Apps for RED, a group of 25 applications where the total sale price of each program went to the charity for a week, and the firm reports this helped raise over $20m."
Should have know that B*****d Bono was involved. Short sighted prick had this stuff only available on IOS so that there where exclusive updates to some games we could not buy on android. You would think AIDS was exclusive to iPhone users.
Apple validate, host, deliver and update digital content for that 30% commission, as well as handling customer complaints and refunds, and providing a massive advertising platform for the vendor.
Compare that with many High Street purchases you make, where middle-men make their mark-up at multiple steps along the way.
Just it does block any type of competition that could drive prices lower. If MS had attempted such a scheme for Windows, everybody would have cried out loud about how evil MS was to force a its dictatorship over software sales. Sure, IE embedded in Windows was a criminal anticompetitive scheme - forcing developers to sell software only through your channel and deciding what they can sell and what not, at what price and getting a ransom on every sale is not anticompetitive... is just "business" - as long as it has an apple logo. If it happens to have a window logo then everything suddenly changes....
Apple emailed us just before midnight UK time Wednesday, saying prices would change "within the next 36 hours", and that "we will simultaneously update the Pricing Matrix". Ok, so we knew the prices were changing, but not by how much or when. Thanks Apple, really helpful.
When they changed (some time overnight Thursday-Friday), we were left surveying the damage: need to reverse rises, or we'll lose sales (we're a non-profit selling apps for disabled kids). Unlike on Goole Play, we can't set our own prices per-country: Apple only allows us to set the "tier" for each app, applied globally. Prices are based on US$, 1 cent less than tier number, so tier 9 is $8.99. Yesterday that was £5.99 and €7.99, today it's £6.99 and €8.99. To reverse the rises in UK and Europe, we've dropped to tier 8, but now we'll get 11% less for every sale in the US. Thanks again Apple. Too bad for anyone who downloaded while the price was raised.
Apps aren't a globally-tradable commodity like oil, and if Google can handle developers setting and controlling their own prices in each currency, one would have hoped Apple could manage that too.
"Apps aren't a globally-tradable commodity like oil"
Why not? You're selling to a single distributor; I really don't like the idea of charging extra to people in one region than another like that.
Now, if you developed, say, an English-language recipe app and sell it for $5, then invest in translating it into French, I could understand you charging $8 - it's probably a smaller market, and you've incurred extra expenses - but why charge your distributor more for stock they ship to the US than for stock they ship to Australia, or vice versa?
If there's a real difference, you could sell both "Recipe App UK" at $8 equivalent and "Recipe App US/Canada" at $9 - but I'd view that as gouging if there isn't a real distinction in your costs between the two. I'm disappointed in Google enabling that sort of behaviour, personally.
I agree it's a bit dodgy that Apple gave so little notice of the new pricing points, though; posting the figures a week in advance would have been much fairer all round.
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