Bloomberg News reports that major hikes were unleashed by Apple Inc. related to the price tiers on in-app purchases and the apps right from Europe to Asia. Doing so will protect the margins since the major currencies are tumbling against the dollar.
Customers that use the euro in nations like Chile, Malaysia, Sweden, South Korea, Egypt, Pakistan, Japan, and Vietnam will experience a surge in prices from the beginning of October 5th, as per a statement released by the company in their message to the developers.
The company’s move to Vietnam comes as a part of the new regulations introduced around tax collection. However, Apple released the statement without mentioning the reason for the price hike everywhere.
One of the key drivers is likely the strong dollar. In Japan, it is observed that the price surge is roughly 30%, which is quite a significant rise following the dramatic weakening of the yen this year. At the beginning of summer, Apple increased the prices of the iPad, Mac, and iPhone due to the disparity in currency. A similar fate was also met by the euro, which is at present trading at near parity against the US dollar and indicating that there will be weakness ahead.
Weakening Currency
Bloomberg News reports that app developers have, over the last one-year increased costs, as shown by an independent study. The cost of in-app purchases surged 40% in July compared to the same period in 2021, as assessed by the consultancy Apptopia. The new framework of Apple will let the developers retain their existing subscribers that opted for subscription services at the present price levels, as stated by the company.
It may be mentioned here that the App Store is one of the major revenue drivers for the California-based company. Apple, which put on sale its iPhone 14 this month across the globe, reported that the revenue from the services missed the June quarter estimates very narrowly.
Bloomberg News reports that Tim Cook, the chief executive officer, in an interview on Bloomberg Television with Emily Chang, acknowledged that Apple is dealing with softness and an economy that is quite slow. However, he also stated that in the fourth quarter, it is quite likely that the revenue will pick up.
Although the performance is good compared to some of its peers in the tech sector, Apple has become more cautious as it is confronting an economy that is sputtering. The maker of the iPhone is also planning to slow down, as well as recruitment is concerned as well as expenses on a few teams in 2023, as reported by Bloomberg News.
