Apple institutes app price hikes in Europe, Canada and Russia as iPhones get more expensive in Brazil

iOS 7 (App Store teaser 004)

As reported by AppleInsider, Apple has raised minimum prices of iPhone and iPad applications in the App Store in Canada, the United Kingdom, Norway and in the European Union.

As a result of the changes, customers in Canada will now see a minimum app price raised from $0.99 (USD$0.83) to $1.19 (USD$1.01). In the United Kingdom, the new minimum tier has gone up from £0.69 ($1.04) to £0.79 ($1.19) and €0.99 ($1.17) in the European Union, up from €0.89 ($1.05) before.

In addition, smartphones, tablets and other gadgets Apple sells in Brazil saw their prices skyrocketing by an average of 10 percent due to the steady devaluation of the country’s currency, real.

“Similar increases are expected in Norway and Russia, while prices are set to see a decrease in Iceland,” reported the publication.

As previously suspected, these price hikes are the result of switching to the per-country VAT model in Europe as opposed to the flat-rate tax. Another thing to factor in: fluctuations in currency exchange rates.

VAT, or value-added tax, is a form of consumption tax in the E.U. and from the perspective of the buyer it’s a tax on the purchase price.

“VAT will be based on the customer’s country of residence instead of being the same across all EU territories,” Apple told developers in December. The Cupertino company yesterday said it paid more than $10 billion in revenue to developers last year, a 50 percent increase over the previous year.

ZDNet added that Apple products sold in Brazil got pricier by as much as ten percent. The country was already paying insane money for iPhones and now the price of the entry-level off-contract iPhone 5s has gone from the previous R$ 2,500 ($938) to R$ 2,200 ($825).

As for the iPhone 6 Plus, Brazilians will be now paying R$ 4,700 ($1,763) for the entry-level model versus the old price of R$ 4,400 ($1,651).

Source: AppleInsider