As the Canadian dollar hovers around a five-year low, the world's biggest technology firm is taking notice. Candy Crush and Fruit Ninja lovers may too.
While Apple Inc. is making more money than ever from apps and games, it recently told developers in three jurisdictions that it's prices are about to go up.
A short statement e-mailed on Wednesday informed software makers: "Within the next 36 hours, prices on the App Store will increase for all territories in the European Union as well as in Canada and Norway, decrease in Iceland, and change in Russia. These changes are being made to account for adjustments in value-added tax (VAT) rates and foreign exchange rates."
On Thursday, the day after warning developers prices will increase, Apple released a statement saying it had set a new record for App Store billings in the first week of January: nearly half a billion dollars. It went on to detail "a record-breaking 2014, in which billings rose 50 per cent and apps generated over $10-billion in revenue for developers. To date, App Store developers have earned a cumulative $25-billion from the sale of apps and games."
In Canada, no tax adjustments are imminent so developers speculated that it must be a reaction to the exchange rate. The Canadian dollar lost about 8 per cent against its U.S. counterpart last year and closed at 85 cents U.S. on Thursday.
An Apple spokeswoman declined to comment on how much higher app prices will be, and couldn't say exactly when the change would happen.
"It's a levelling of the playing field ensuring the revenue generated, or the cost for the customers, are on par globally," Mark Pavlidis, co-founder of Flixel Photos, told The Canadian Press.
Apple doesn't actually set prices in its App Store, but lets developers choose from a range of options. Apple's current Canadian pricing tier starts at free, then 99 cents and then goes up by a dollar ($1.99, $2.99, etc.).
"Smaller developers can't really survive on that," says Jakub Koter, co-founder of Red Piston Inc., an app developer based in Windsor, Ont.
"These apps are already so cheap – sometimes I do wish the lowest price was higher than 99 cents." Mr. Koter has been developing apps since the launch of the iPhone in 2007, when the standard price was $9.99. Within a year, competition drove that down to $0.99, and now most successful games are free, but with in-app purchases, such as bonus game levels (which also follow Apple's pricing tier).
Mr. Koter said he doesn't anticipate a price shock whenever the App Store hikes arrive, and his company will likely not try to go to a lower price tier.