Apple plans to increase prices in the App Store starting next month

Apple Inc. announced significant increases in its app and in-app purchase price tiers from Europe to Asia to protect its margins as major currencies plummet against the US dollar.

Customers in countries using the euro, as well as Sweden, Japan, South Korea, Chile, Egypt, Malaysia, Pakistan and Vietnam will see price increases as early as October 5, the company said in a note to developers.

The move in Vietnam also reflects new local tax collection regulations, Apple said, without detailing why prices are being raised elsewhere.

The strong dollar could be a key driver. In Japan, prices are up about 30 percent, a sharp rise that follows the yen’s dramatic weakening this year.

Apple raised the prices of its Mac, iPhone, and iPad lines earlier this summer to smooth out currency differences.

The euro has suffered a similar fate, now trading near parity against the US dollar and showing signs of further weakness to come.

“It’s not the first time Apple has adjusted App Store prices, but this increase is pretty steep,” said Tokyo-based analyst Serkan Toto of Kantan Games.

“It is inevitable that the price adjustment by app and game developers will be felt in the affected markets. People may now be more reluctant than ever to make in-app purchases, and developers may be forced to get more creative with pricing in the future.”

According to an independent study, app developers have already increased their prices in the past year.

The average price for in-app purchases increased by 40% in July compared to the same month in 2021, consultancy Apptopia estimates.

Apple’s new framework will allow developers to keep existing subscribers at current price levels for all subscription services they offer, the company said.

The App Store is a key revenue driver for the Cupertino, California-based company. Apple, whose iPhone 14 went on sale worldwide this month, reported service revenue that fell just short of estimates in the June quarter.

Chief Executive Officer Tim Cook, in an interview with Bloomberg Television’s Emily Chang, acknowledged that the company was struggling with “some softness” and a slower economy, but said he expected earnings to pick up again in the fourth quarter.

Despite performing better than some tech rivals, Apple has become more cautious when faced with a faltering economy.

The iPhone maker plans to slow hiring and spending for some teams in 2023, Bloomberg News reported. Apple plans to increase prices in the App Store starting next month

Fry Electronics Team

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