Apple hiking prices in App Store for Canadian customers due to falling loonie

By , on January 8, 2015

(Twin Design / Shutterstock)
(Twin Design / Shutterstock)

TORONTO — Get your 99 cent apps while you can, iPhone and iPad users.

Apple will soon hike the prices in its App Store for Canadian customers, according to an email sent to software developers.

The email, sent out on Wednesday, said the unspecified price increase in Canada, Norway and European Union countries would take effect within 36 hours.

Apple said foreign exchange rates were triggering the increase in Canada.

A spokeswoman for Apple would not comment further on the imminent price changes.

It’s unknown how much prices will increase and if all products in the App Store are affected.

It’s not an entirely surprising development and is positive news for developers, says Mark Pavlidis, co-founder of Flixel Photos, which produces the Cinemagraph line of software for Apple mobile devices and Mac computers.

“It’s a levelling of the playing field ensuring the revenue generated, or the cost for the customers, are on par globally,” says Pavlidis, who noted it’s the first time the Canadian App Store has seen a price change.

The loonie crashed into the high 70-cent range versus the U.S. dollar in the fall of 2008 but there was no price adjustment in the Canadian App Store. It lingered there for about six months before climbing upward into the 90-cent range and above parity.

“Consumers were getting a good deal but from a developer’s point of view it’s like, ‘Hey, we’re getting short-changed here because it’s not at the kind of price tier of where the current exchange is,'” says Pavlidis.

Based on how Apple has adjusted its App Store prices in other countries for currency fluctuations, Pavlidis predicts we’ll see a bump up of maybe 10 per cent, taking a 99 cent app to $1.09.

“The changes have always been where they’re not taking more than the current exchange rate, there’s still a bit of a buffer there,” he says, noting that a 15 per cent increase would be closer to parity with U.S. prices since the loonie is currently worth about 85 cents US.

“I doubt they’ll go to $1.19, it’ll probably be $1.09.”

While a few extra pennies for an app might not seem like a big deal for consumers, it could be make-or-break for many developers operating on slim margins, says Pavlidis.

“From a developer’s point of view it’s an impact in sales of 10 per cent … on the consumer end, when the consumer apps are typically in the price range of $1 to $3, the psychological barrier of an extra dime is much less significant. But the aggregate of that for developers over time, that adds up.”

Based on the history of price increases in other countries, he’s not expecting the change will alter consumer behaviour beyond a slight blip.

“The overall impact is going to be fairly small,” Pavlidis predicts.

Canadian app developers are also in the dark about the upcoming price changes and know no more than consumers do, he adds.

“Apple’s a big black box and they won’t tell you anything,” Pavlidis says, noting that even when his Cinemagraph products were featured on the App Store or in Apple’s retail stores there was no advance notice.

“One day (the Mac product) showed up in the stores, they don’t let you know, they don’t tell you, it just happens. Same thing with getting featured on the App Store. It’s a black box we have to contend with.”