Australian developers making applications for Apple’s iOS product range were caught off-guard by the company’s sudden pricing changes, which have seen prices cut for apps under $5 to match American pricing.

While the pricing changes are good news for consumers with apps under $5 now priced the same as their American counterparts, for developers the news isn’t so good, with the sudden pricing changes leaving many scratching their heads over how to best price their apps for Australian customers.

Shifty Jelly, the company behind popular Australian Pocket Weather AU weather applications for the iPhone, iPad and iPod Touch, said the price drop was “concerning”m with GST eating into their margin. “As a developer who makes most of our money selling Australian applications, it [the price drop] is a little bit concerning, because we still have to pay a 10 percent GST back to the government. So if our app sells for $1.99 and 18 cents is GST that means that prices here are actually lower compared to the US,” a representative from the company said.

“Since we live in Australia, and can’t really take advantage of our high currency, that means we lose out overall. Still I’d emphasise that for consumers this is very good news.”

Meanwhile Savage Interactive, the team behind popular painting application Procreate, said the changes won’t have “much” of an impact on its sales, adding the move was a win for Australian customers.

“It was a bit of a surprise to wake up to this news. We’re happy to see this change — but we need to keep in mind that these price changes only align with the USA store, for apps that are priced below $5 USD,” the company said in a statement. “Ultimately this is good news for our Australian customers.”

Developers received an email from Apple approximately nine hours prior to the changes, but aside from vaguely suggesting that “pricing changes” could mean customers may not be able to purchase apps during the downtime, it contained little warning of the significant price cuts.

“We were not happy about the lack of notification, but just have increased our prices back to around the old level again,” another Australian iOS developer behind a number of apps for local pilots, OzRunways, mentioned. “Our aviation apps are useless to people outside of Australia, so Apple assuming we based out pricing on $US is just stupid.”

Instead, the OzRunways spokesperson said, they’d encourage Apple Australia to remove the current fixed pricing tiers which don’t automatically adjust for changes in the value of currency, or add support for developers to set different prices for apps based on users’ region.

“The whole policy of price tiers doesn’t make a lot of sense. What I’d like to see is that you set your price in a chosen currency you like and it just uses a conversion for other app stores. Or allow you to set different prices in different stores.”

Prices for music, books, movies and television shows also available through Apple’s iTunes store didn’t change — it’s thought that the complex licensing arrangements prevented Apple from reducing prices.

Image credits: Shane Fullwood (CC2.0), Acaben, CC 2.0 and Gartner

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1. Alan Zeino
   Posted 15/07/2011 at 1:56 pm | Permalink | Reply

   If you’re making an app targetting the Australian market, then yes, this is an unfortunate development.

   If you’re making an app that targets global iOS device users, this is a non-issue since most sales on global apps see very few purchases in Australia. Usually, the majority of buyers of my apps are in the United States, France, Germany and Japan.

2. Graham Dawson
   Posted 15/07/2011 at 4:24 pm | Permalink | Reply

   Its only unfortunate if devs stick to the new demoted price level. There is nothing to stop devs putting prices up to compensate. However, because of the price tier system you only have limited choices e.g. if an app was selling at $2.49, then Apple would have put it down to $1.99. You can easily enough decide to up your price to the next tier available ie. to $2.99 instead, but that is 20% above your original price instead of 20% below it. How will changes like this affect your app in the marketplace? It all depends on price elasticity. Best strategy is to try it and see.