Ben Dodson

Freelance iOS, Apple Watch, and Apple TV Developer

Some thoughts on Apple's new Alternative Tier A and B pricing strategy for apps

Apple increased their prices for apps in the UK yesterday due to the current changes in the GBP vs USD exchange rate. One of the interesting changes that came with this were two new “alternate tiers” which would allow developers to maintain the previous 79p price point or drop it down to 49p. I was asked about this by BBC News and gave this quote:

I don’t think many publishers will respond to that change. It’s just throwing money away and there’s no reason to give people in the UK a discount. I certainly won’t be discounting my own apps.

I stick by that today as I don’t see why developers should be penalised for Apple adjusting to economic conditions; it is a change in price that UK users will get used to in the same way they did when the lowest tier changed from 59p to 69p and then again to 79p. This is especially true bearing in mind that the US App Store doesn’t have sales tax included whereas the UK does have VAT (so at current exchange rates a $0.99 app would work out around £0.96).

The key thing though, and something I didn’t clock onto fully until looking again at the charts today, is that Alternative Price Tier A and B doesn’t apply just to the UK; they change prices in many places such as China, Australia, and Canada but maintain them in other places such as Japan and Denmark. If you went for Tier A you’d be reducing the price of your app by 50% in the UK but reducing it by a whopping 83% in China! There are also a few odd choices such as Canada’s pricing being $1.39 at Tier 1 (which is $0.99 in the USA) but it drops to $0.99 for both the A and B Alternate Tiers.

If you are a worldwide developer wondering about which tier to choose, I would urge you to stick with the basic Tier 1 pricing. If you choose something like Alternate Tier B to maintain the old price for the UK, you could be dropping prices dramatically in other regions as well. I’m not sure why Apple decided to introduce these tiers but they are not helpful to developers, especially at a time when we should be trying to get away from the bargain basement $0.99 apps that are so prevelant.

If Apple want to reduce prices further, perhaps they should start by lowering their 30% cut?

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