A Brief Note on Pricing

If you are an iOS user in Europe you might have noted that prices of Apps – including iPeng – have recently gone up by around 10%-14%, in the case of iPeng it’s from €4.99 to €5.49 for the iPhone version, from €7.99 to €8.99 for the iPad version and from €3.99 to €4.49 for the Playback In-App-Purchase.

This is not a change we or other App developers have made, it’s a change made by Apple to adapt to exchange rate changes between different currencies.

How Does App Store Pricing Work?

To fully understand why this is, you need to understand how App Store pricing works. In the App Store, a developer doesn’t set individual prices per country, a developer selects a US-Dollar based price tier for which Apple then has a separate price per currency which is what you see in the store. These different prices do take into account exchange rates but also different taxation schemes. The US price, for example, does not include any VAT but a sales tax will be added to it in some states while the Euro prices include 15% VAT that are being paid by iTunes in Luxembourg.

What developers can NOT do is to set a different price tier in one region compared to another one, so you can’t decide to sell an App in Europe for a price of X and select a price from a different tier for the U.S. or the rest of the world.

What Has Changed?

What has changed now, are the Euro prices in this table. Compared to the rest of the world, European prices have actually been somewhat lower in the past (about 12% on the net value), mainly caused by the change in exchange rates since the values were originally set in 2008. With the new prices, they are now closer on a net basis (Europe is now around 2% higher), gross prices add the higher tax in Europe to that.

A similar move happened in the UK one year ago for similar reasons, traditionally prices in the UK had been even lower than in the Euro area and were raised last year.

One should also note that this is not a “creeping price increase”, it’s indeed an adaptation to exchange rate levels and there have also been countries were the price tiers have been lowered due to exchange rate effects.

Did We Change Our Prices?

No, we did not. iPeng still sells in the same price tiers as before. iPeng for iPad has always sold in tier 10 (10 US$), iPeng for iPhone was originally priced the same and is now selling in tier 6 (6 US$) while the Playback feature sells in tier 5 (5 US$) for the fully priced and in the lowest tier, tier 1 (1 US$) with the discount.

What did change are Apple’s pricing levels in Europe and we can not change the prices in Europe without affecting the prices everywhere else in the world at the same time.

We do believe iPeng offers a good value for money, with all updates being free (and there are frequent updates with iPeng! Just read this blog to see what added value you got for free as an existing iPeng customer only this year!) and the fact that you can install it on as many devices as you like. Plus you do get an 80% discount on the Playback feature when you own both Apps.

About Author: coolio