As the Brexit vote approaches Apple has decided to increase the prices of its apps by 25 per cent in the UK after seeing the pound lose value. In real terms this means that an app or in-app that cost 79p will now be valued at 99p. This move brings the pound on comparable terms to the US dollar, with what is 99p in the UK, available for 99 cents in the US – the difference being the US figure does not include VAT.
It comes after increased prices for iPhones, iPads and Mac computers were announced in the second two quarters of 2016. The new price alterations do not affect songs, films and TV shows in the iTunes Store, but rather it is purely software that comes under the new category of price changes.
In 2016 Apple made app sales of $28.5bn.
Since Theresa May made clear that the UK will move away completely from the single market after the June 2016 vote to leave the EU, the pound has dropped from over $1.45 to under $1.22.
App developers are not in full control of pricing their new products, but instead select one of several price ranges, which Apple has available based on the country it sells apps in.
The first tier amounts to 99 cents in the US, 79p in the UK, €1.09 in the eurozone, and it scales from there. The change, which will be reflected in prices in the coming days, takes the UK first tier price to 99p.
A spokesman for Apple explained: “Price tiers on the App Store are set internationally on the basis of several factors, including currency exchange rates, business practices, taxes, and the cost of doing business. These factors vary from region to region and over time.”
Apple App Store sales have increased by 40 per cent to $28.5bn (£23.5bn) in 2016. Prices will also increase in India and Turkey.
Games will increase in price too – an expected example of that being Super Mario Run. The 20 per cent increase in that scenario will see in-app purchases such as this go from £7.99 to £9.99 – not an insignificant price increase in actuality.
Apple, Microsoft and Tesla have all hiked up the prices of some of their products are watching the pound lose value. Apple’s new iPhone 7 is priced at £599 versus its previous price (for the earlier model) which was £539. A selection of laptops will also see a 20 per cent increase.
Microsoft has made price increases in its cloud computing and enterprise software for businesses in the UK, with Tesla taking prices up by 5 per cent.