Oomph CEO Keith Ahern – featured in Smartcompany.com.au 14th July 2011
Apple has cut pricing on its App Store following years of complaints from users, app makers and even politicians to better reflect currency disparity between Australia and the United States.
The move not only reflects the growing discontent among users of digital products who say local prices are not reflecting the stronger dollar but also the wider issue of how sellers of digital goods think about selling in different markets.
While shoppers say bricks and mortar stores may be entitled to charge higher prices due to shipping, rent and other related costs, they argue digital goods do not incur any of those charges.
The changes have come as part of a maintenance update, and were noticed by developers early this morning.
Apps that previously cost $1.19, such as the popular game Angry Birds, now cost only $0.99 – the same price Americans pay.
The changes affect the “tiers” for prices. Apps priced at $1.19 have now moved to $0.99, while apps have fallen from $2.49 to $1.99, from $3.99 to $2.99, from $4.99 to $4.49 and from $5.99 to $5.49.
Apps priced at $7.99 have dropped to $6.49, $8.99 to $7.49 and from $9.99 to $8.49. Apps that were previously priced at $11.99 are now at $9.49, with apps also falling from $12.99 to $10.49.
While more expensive apps are still priced slightly above the same app in the US store, Australian customers are still saving money.
But while some apps have come cheaper in the lower-priced categories, in some international markets they have become more expensive. App makers around the world are noticing discrepancies between the old and new price formats.
For example, British App Store customers have found that apps have increased on all price points, with £1.19 apps now costing £1.49 and £9.49 apps now costing £10.99.
Apple was contacted this morning but SmartCompany did not receive a reply before publication. However, it has been reported the move was made due to changes in local currency.
MoGeneration chief executive Keith Ahern has welcomed the move saying he believes it is the first time such a currency shift has occurred since the App Store launched in 2008.
“They almost never adjust the price of hardware until there is something new out, so if the currency takes a dive generally it’s not passed on. This is the first change I’ve seen since the launch of the App Store.”
“We absolutely welcome it,” he says.
Publishers were not given a specific notice about the change, although it was included as part of a notification that maintenance updates would be underway overnight.
Ahern says he is now contacting clients to see if they want to change prices.
“We’re basically just asking them what they want to do, and if they want to see their prices reduced. It’s really fantastic that it lines up with the US price.”
Customers have been calling for changes for years. Labor member of Parliament Ed Husic said earlier this year that Apple’s prices represent a large discrepancy, and this morning told Fairfax he welcomed the new price points.
“Congrats to them for starting to be responsive on this issue and let’s see what else happens with some of their other prices,” he said.