Apple Inc. Tweaks App Prices Thanks To Currency Fluctuations

Apple Inc. Tweaks App Prices Thanks To Currency Fluctuations
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Apple made changes in its software application prices last week in multiple countries from Canada to Europe due to the currency fluctuations in recent months. This marks the one of the biggest moves made by the company to date in the midst of currency volatility, reports Bloomberg.

Currency fluctuations to blame

Last week the iPhone maker reached out to the European Union, Norway, Canada and Russia, notifying developers that it is increasing prices because of foreign exchange rates and taxes. Last week in Canada, entry-level prices for apps surged to $1.19 from 99 cents, and in Europe, the basic app price rose to 0.99 euro from 0.89 euro. Apple increased the price of the iPhone in Russia last month after online sales took a break for a short period when the value of the ruble dropped.

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The Cupertino, Calif.-based company acknowledged the ways in which its business will be affected by the strength of the dollar. Chief Financial Officer Luca Maestri said in October that the company is going through “significant foreign exchange headwinds” from the strength of the dollar.

Tom Meumayr, an Apple spokesman, testified that the company has conveyed to developers in Canada, Russia and Europe about increases in prices, according to Technology blog 9to5 Mac.

Not the first time for Apple

The prices of the apps are categorized in tiers, and Apple adjusts them all over the world in local currencies. In the United States, the basic price for a paid app is 99 cents. In 2012 also the company took a similar approach by increasing app prices in Europe, and last year it changed its pricing in Asia. For Canada, this is the first such instance.

Slaven Radic, chief executive officer of app-developer consultancy Tapstream Network Inc, told Bloomberg that even though Apple has made such changes previously, it avoids doing so on a regular basis. Radic said, “They’re very measured about this — sometimes they’ll lose money if they can avoid showing too much price movement on things.”

Over the past 12 months, all significant currencies have dropped against the U.S. dollar as the U.S. economy speeds up. The Canadian dollar has taken a dip of around 10.1% since July, and on Jan. 9, it dropped to the lowest level compared to the U.S. dollar in 5 1/2 years. The Euro has declined by around 13% against the dollar in the last six months, according to data compiled by Bloomberg.

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