back to article 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 …

  1. SuccessCase

    I think you will find it's not Apple putting up their prices. Rather they are collecting VAT on behalf of HM Revenue and Customs.

    1. Anonymous Coward
      Anonymous Coward

      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!

      1. Avatar of They
        Thumb Up

        Speaking as a non Apple person

        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?

        1. Anonymous Coward
          Anonymous Coward

          Re: Speaking as a non Apple person

          The quality of apps and the tablet is much higher than Android shovelware.

          The best music production apps on the iPad have no Android equivalents.

    2. thames

      I think you'll find they are putting up prices. They are raising prices in Canada with no changes in tax rates here.

      1. SuccessCase

        No they aren't, this is about app rates and it is the app author who decides how much the app costs. Apple take 30%, always have done, no change. The only change as already said are the tax rates.

      2. LeeH

        The place of supply VAT rule will soon arrive in Canada and Japan. It will come to all OECD countries unless we put a stop to it now.

        The reasons behind the price rise are 1, VAT rule changes, and 2, exchange rate changes.

  2. garthwd

    The only price hike I can definitely see is Football Manager Handheld 2015 increasing from £6.99 to £9.19. They're increasing the prices more than VAT.

    1. Anonymous Coward
      Anonymous Coward

      The author sets the price not Apple (apart from the adjustments in VAT across the EU due to change in regulation and place of supply changed to the end user). If the change is more than the difference in VAT rates suspect the author has changed their sell price.

      1. big_D Silver badge

        @AC not completely, read the article again, they are also adjusting the exchange rates. The dollar has recovered a bit against other currencies lately, so that means that prices might rise slightly here as well, depending on what averaged rate they are now using.

        1. Anonymous Coward
          Anonymous Coward

          Exchange rates?

          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.

          1. Chris Evans

            Re: Exchange rates?

            Correction

            "... because of tax reasons, Apple US leave overseas revenue in the countries that charge them the least tax"

          2. big_D Silver badge

            Re: Exchange rates?

            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...

      2. Mark H

        No.

        The author sets the price 'tier'. Apple sets the actual price of that tier.

  3. werdsmith Silver badge

    So the Author sets the price then?

    And most of them coincidentally choose 69p (79p)?

    I think the author chooses which price band, but Apple set those price bands.

  4. Anonymous Coward
    Anonymous Coward

    quotes

    You missed out the quotes in Land of the "free"

  5. David 138

    "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.

    1. Zippy's Sausage Factory
      Coat

      Don't tell Microsoft about that one - they'll use it for an ad campaign...

  6. Anonymous Coward
    Anonymous Coward

    30%!

    A rip off

    1. ravenviz
      FAIL

      Re: 30%!

      Don't like? Don't buy!

    2. Mike Bell

      Re: 30%!

      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.

      1. LDS Silver badge

        Re: 30%!

        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....

        1. Anonymous Coward
          Anonymous Coward

          Re: 30%!

          Yes we need lower prices, how dare those capitalist pig dogs charge 69p for software that has taken years of developer time to create.

    3. Handy Plough

      Re: 30%!

      You'll be apoplectic when you find out how much supermarkets add in markup.

      Oh, BTW, Google put a 30% markup in their Play Store too. https://support.google.com/googleplay/android-developer/answer/112622?hl=en

  7. Phil Endecott Silver badge

    > Apple traditionally claims this is down to the higher cost of doing business overseas

    No, it's due to the UK and EU prices that you quoted being inclusive of VAT but the U.S. prices being exclusive of sales tax.

    1. Zippy's Sausage Factory

      And of course, it's against the law to quote VAT-exclusive prices to the consumer, anywhere in the EU. (A good thing, too. if you ask me...)

  8. Anonymous Coward
    Anonymous Coward

    I CANT GO FOR VAT (NO CAN DO)...

  9. Chika
    Trollface

    Apple traditionally claims this is down to the higher cost of doing business overseas.

    Which is why Apple, like so many other Merkan corporates, charge £1 to $1 in so many places, at the very least. Bah...

  10. CCD

    It's the way Apple handled it

    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.

  11. James 100

    "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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