Brits lose out as iTunes prices jump
Aussies do well
Most stories covering Apple's international price rises have focused on the base price - up from 59p to 69p in the UK, a rise of 16 per cent or so - the increase is higher elsewhere.
Case in point: readers buying comics through iPad apps and who used to pay around £1.19 per issue will now pay £1.49 - a 25 per cent price rise.
As one pundit put it on Twitter last night: "That's some rate of inflation, Apple."
Other rise are more modest. An app costing £4.99 yesterday now costs £5.49, a rise of just over ten per cent.
The price changes applies to Apple app stores - and in-app purchases - made outside the US, and is said to have followed complaints from Australians that they were paying too much, a result of the increasing strength of the Aussie dollar.
AUD prices were pegged at an old exchange rate.
Indeed, Australians have done well: prices are down from AUD 1.19 to AUD 0.99.
Brit prices are up even though the US dollar recently dipped against sterling. The US price of $0.99 equates to £0.62, by the current exchange rate.
$1.99, a typical in-app purchase price, is £1.24, not the £1.49 Apple is now applying.
Rip-off Britain? Rip-off Cupertino, more like. ®
$1.99 is £1.48 after currency conversion + VAT
So Apple are making a whole 1p extra by "over charging" us (according to Google's currency conversion rate)
Oh the humanity!
These stories crop up with such regularity, concerning all sorts of companies not just Apple, that I'm pretty astonished that anyone would post an article like this without doing this very rudimentary bit of maths.
It makes you look really dumb.
£1.24 dollar conversion * 1.2 vat = £1.49
VAT part 2
..and just to clarify:
59p before in the increase included UK VAT
69p after the increase also includes UK VAT
VAT went up 2.5%. Apples increase is 16%.
There is no US vs UK VAT arguments to be had here...
What he said
In this particular case, it looks like VAT might be making the difference.
That is not to say Apple's prices have not assumed some mythical currency in the UK that is at parity with the USD in the past.
But if the price 'should be' 1.25 GBP and is actually quoted as being 1.50 GBP, that is exactly the kind of 20% increase that you might expect to see if for example VAT were set to 20%.
In the US people are used to seeing prices advertised before any sales tax is added, and since these taxes are local to the State, County and even City in come cases, I suppose this makes sense. But in the UK, prices are always quoted inclusive of all applicable tax (by law, no less).
So in the US you see something on sale as 1.99 USD, but you might pay anywhere between 1.99 USD and 2.25 USD or so for it. In the UK you see something advertised as 1.49 GBP and you will pay 1.49 GBP.
And long may it continue to be so.
Rip-off? Not in this case, I think.
I think a significant portion of the difference between US and UK prices is UK VAT.