Apple is set to hike prices of apps in countries like Russia, Europe and Canada and was notified to developers in an email. European Union’s change in VAT policy, Canada’s foreign exchange rates and Russia’s fall in currency were the reasons for the unspecified price hike.
The move follows Apple’s announcement last week that it helped developers earn billions and notified developers that there would be a price hike in Norway, Canada, Russia and other EU countries. The email was received by developers in Apple’s iTunes Connect Program. However, there would be a price decrease in Iceland.
“Prices on the App Store are changing to account for adjustments in value-added tax (VAT) rates and foreign exchange rates,” said Apple spokesperson.
Last year, Apple had changed its VAT policy for apps which charged users based on their country of residence instead of a lower flat rate policy. Changes to Apple’s VAT policy came into effect on Jan.1 2015 and were not notified to customers. The policy also stopped European developer companies from shifting between several EU countries for the best tax rate.
With the adjustment in App Store prices there is likely to be a 10 percent hike, which would take a 99 cent app to $1.09. The price changes would apply to apps, movies and e-books. Amazon stated that it would not raise the cost of Prime membership, but hinted at an increase in e-book prices.
Microsoft stated prices of Skype will be changed from Jan.1, 2015 in accordance with country-wise VAT rates instead of 15 percent. Apple had hiked prices in Russia for products like iPhone due to the decreasing ruble and would depend on the economy. Developers will benefit from the marginal increase in the app pricing and is not likely to have a major effect on consumers who are ready to shell out extra cents for quality apps.