Last week, Apple’s iTunes App Store started displaying app prices in Indian Rupees, in addition to Russian Ruble, Turkish Lira, Indian Rupees, Indonesian Rupiah, Israeli New Shekel, South Africa, Saudi Riyal, and UAE Dirham. This was first reported by Nuclear Bits. While there were reports of some initial hiccups, including app prices not being displayed accurately and some Indian credit cards not working (I was not able to buy apps through my HDFC Bank issued MasterCard for some hours), the switch over appears to be complete. What this essentially means is that instead of app prices being displayed in US Dollars, Apple will convert them to local currency and display prices accordingly. Note that conversion will be according to Apple’s terms. There’s also a pricing matrix chart that lists various app pricing tiers and conversion rates (accessible to developers), but essentially, for every $0.99 , the user pays Rs 55.
Should developers price apps differently in different markets?
Why not have a different pricing structure for each currency and allow developers to price their apps according to their own preference? A few days back, Google started allowing Indian developers to sell paid apps, letting them price their apps in the range of Rs 50 to Rs 10,000. It even lets developers price their apps differently in different markets. Earlier Nokia had also reduced the levels at which developers can price their applications, according to UnleashThePhones, pricing level 1 apps (that usually cost $1) at Rs 5. While that pricing was ridiculous, we do feel that apps should be priced keeping in mind the currency value. So a $0.99 app could be priced at Rs 25 or Rs 35, depending on the market, and the users’ propensity to pay.
Currency conversion: Google uses a different mechanism to convert currency for apps that are priced in US$. Try searching for a paid app and you’ll notice some difference between pricing on the Play Store and on Apple’s App Store – for instance, the popular game, Temple Run Brave is priced at Rs 53 on the Google Play Store, while the same game is priced at Rs 55 on the App Store, at the time of writing this post. Apple also used to convert prices depending on the dollar rate on the day it collected the payment from the credit card issuer, earlier.
How Does It Impact You?
Users would no longer need to pay a Foreign Currency Mark-up fee which varies, depending on the Bank which has issued the credit card (HDFC charges 3.5% on each transaction on my card). It would be interesting to observe, how local currency pricing would affect app purchase behavior among users.
For some users, knowing the price in Indian Rupees makes it easier for them to take a decision about whether to purchase or not, because they might not be clear about the conversion rates. This is likely to have an impact on the base of users who don’t buy because of the dollar pricing, so transparency helps decision making, and rupee pricing makes it comfortable for them. Personally, I prefer a Rupee pricing, as it’s more transparent and I know how much I’m paying.
For another set of users, the dollar pricing of $0.99 or $9.99 is such that it makes them feel they’re buying an international product or that they might be comfortable with the dollar price. The moment you price it in Rupees, it makes them realize the actual rupee value of what they’re buying; different benchmarks in terms of value, for different currencies. So a lot of users might find Rupee pricing discouraging. For example, Priyanka Joshi, tweeted the other day that she found dollar pricing better.
Other than the psychological difference, some might also argue that Apple’s fixed tier of Rs 55 would make apps a bit expensive if the value of the Dollar depreciates (1 US$ equals approx Rs 53.8 at the time of writing this post), but that would be a minor difference, and assuming that iPhone users pay a large amount of money buying the phone, we feel that they’d not care much about the difference. But do tell us how this impacts you. Would it make a difference?