- Apple has totally overhauled the pricing structure of its App Store.
- Developers get more control over how much their apps cost in different countries.
- Prices now run from $0.29 to $10,000, minus Apple’s cut, of course.
Apple is giving developers way more control over their app prices, but it's still levying its 30 percent tax.
For years, developers have been limited in how much they can charge for apps in Apple’s App Store. This is why app prices are all so similar, all coming in at $0.99. or $9.99, rather than $8.76, for example. This week, Apple has expanded the available range of prices massively, almost tenfold, to 900 options. Prices now run from $0.29 up to $10,000 (although higher prices are only available on request, subject to approval). But there’s more big news. Variable regional pricing will change the way apps can be sold internationally.
“Apple’s new pricing in their app store will help app developers reach even more people by allowing them to price their app according to locations and markets,” Kyle MacDonald, VP at mobile app company Mojio, told Lifewire via email. “It’s potentially very helpful to developers, as they can now reach more people that might be currently priced out of buying an app. Overall, this also means that Apple benefits as well, as they also get a cut of each sale. It’s a good plan to increase sales worldwide.”
In addition to the expanded range of prices, developers can now choose different endings. Instead of $4.99, they can sell for $5.00. And double leading digits are also available. The example given by Apple in its press release is ₩110,000, so perhaps these formats are popular in places like South Korea.
And now, in addition to being able to choose prices per storefront (the term Apple uses for each country’s local App Store), developers can also choose their primary currency.
For example, until now, a US-based developer would set their price in dollars, say $9.99 for an app purchase. Then, Apple would automatically translate that price to various currencies worldwide, like €12.99 in Europe.
It's potentially very helpful to developers, as they can now reach more people that might be currently priced out of buying an app.
Now, a developer could choose Euros as their primary currency and have the auto-calculated prices based on that. Apple’s example describes a US-based game developer whose primary market is Japan. In this case, the developer would choose the Japanese Yen as their primary currency, so the price in Japan stays fixed as those in other regions fluctuate.
And here’s an interesting data snippet from Apple’s announcement: the App Store operates across 174 storefronts and 44 currencies.
This brings quite a bit of flexibility to international pricing. A developer can now choose their principal currency, letting the other territories fall where they may. But they can also lock prices in certain stores, which allows them to keep prices much lower in developing countries, for example.
And what about that new $10,000 price mentioned at the top? You might remember the I Am Rich app, a $999.99 app that did nothing but demonstrate that the buyer has spent a grand on a useless app. Is that the kind of thing Apple is encouraging here?
Probably not. More likely, this is a way for Apple to attract enterprise and business app makers to iOS. We might all be used to paying a buck for an app that should probably cost a lot more, but in the world of business software, even $10,000 isn't crazy money.
“Not $10k, but something like Autocad is $1,865 a year, $5,000+ for [three] years. I believe this is likely laying the groundwork for full pro apps,” said Apple enthusiast Dlewis23 in a MacRumors forum thread.
And, of course, it doesn't hurt Apple to take its 30 percent cut of every $10K sale.
And that brings us to the App Store’s big problem. Apple still takes a percentage of all purchases (although there are special rates in some cases), and the new App Store pricing structure does nothing to change this. And in fact, as Apple faces dire supply shortages with its flagship iPhone 14 Pro, it seems even less likely to give up any part of its ever-growing “services” category, which notched up a new record in the latest quarterly financial results.
The two biggest developer complaints about Apple’s App Store are this “Apple Tax” and the often-fickle and self-serving rules that it applies to apps, possibly to exclude competition.
For developers of complex, pro-level apps, it might be possible to write off that 30 percent cut. What is a lot harder is investing years of development effort into an iOS or iPad app only to have Apple refuse to let it in the store. For Apple to encourage deep and complex professional apps to release on its mobile platforms, allowing a $10,000 price level isn't nearly enough. It needs to fundamentally change how the App Store works.
We won't hold our breath.