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Apple Spiking App Store Prices In UK: 25 Percent Hike Due To Brexit Currency Swings

17 January 2017, 12:11 pm EST By Alexandra Burlacu Tech Times
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Britain's decision to leave the European Union, known as Brexit, has resulted in currency fluctuations that ultimately translate to higher prices in some cases.

Various products and services got a price hike after Brexit and Apple is the latest company to adjust its pricing scheme accordingly. As the pound keeps losing value, Apple's App Store prices in the UK will see a 25 percent spike to counter the currency fluctuations.

Apple announced the UK price increase in a letter to developers. Apple-centric publication 9to5Mac was the first to report on the matter, and The Verge later confirmed that it was true.

Apple UK App Store Price Hike

In the Brexit aftermath, the cheapest applications available in the UK App Store will see a price bump from £0.79 to £1.99 (around $0.97 to $2.45), the mid-priced ones will jump from £1.49 ($1.84) to £1.99, while the more expensive ones such as Super Mario Run will spike from £7.99 to £9.99 ($9.85 to $12.32).

Apple is not increasing its prices only in the UK; other countries such as Turkey and India will see a price hike as well. However, the additional cost in the UK is a result of the currency swings in the Brexit aftermath.

The British pound has dropped in value significantly and it's nearing a 31-year-low against the U.S. dollar, and Brexit ripples are expected to continue for a good while.

Weakened UK Pound To Blame For Price Hikes

"The weakened pound sterling exchange rate combined with UK's 20 percent VAT rate means that app prices have now reached parity with the United States numbers," 9to5Mac points out.

For now, Apple's UK App Store price increase is bigger than what the pound lost against the dollar, but financial analysts expect Brexit to drive the pound's value down even further.

The new prices for the UK App Store will start rolling out within the next seven days and affect all pricing tiers.

"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," Apple explains in a statement to The Verge. "These factors vary from region to region and over time."

The price increase doesn't apply only to apps and games, but also to in-app purchases. On the bright side, subscription plans remain unchanged, at least for now.

It's also worth pointing out that in its letter sent to iOS and macOS developers, Apple announced the App Store changes but made no mention of price adjustments for iTunes music, movies, and other content. Nevertheless, the changes are expected to affect content on iTunes as well.

The UK may be the most affected by Apple's new price changes, but other countries will also see notable modifications. As CultOfMac reports, India got a 14 percent service tax in addition to the 0.5 levies implemented on Dec. 1, 2016. Russia saw an 18 percent VAT, while Romania saw a tax increase from 18 to 19 percent.

Developers can learn more about how the new price changes affect their revenues from the documentation they received from Apple.

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