Apple budges on App Store pricing after fielding complaints

Mobile applications on Apple App Store [SCREEN CAPTURE]

Apple will loosen its grip on pricing for app purchases to give more autonomy to developers.

The company said it will add 700 new price points and new pricing tools, its first big change to the pricing policy in about 15 years.

The new policy will allow developers to have more control over pricing as they will be offered more options.

Apple's App Store charges by tier.

In Korea, tier 1 is set as 1,500 won ($1.13) and tier 2 3,000 won. Developers are only able to charge for their services based on these tiers.

“The change is the biggest upgrade since the App store was released in 2008, increasing the options for app developers ten-fold,” said a spokesperson for Apple.

Starting Wednesday, the change has been implemented for apps offering auto-renewable subscriptions, while changes to in-app purchases and other apps will be made starting next Spring.

Since its release, developers were able to choose pricing from 94 tiers, which include seven alternative tiers related to currencies.

Pricing tiers will start from 400 won to 16 million won, and can be selected differently by country. Previously, prices were fixed for every country once the developer selected a tier in one country. For instance, if a developer chooses tier 2 in Korea (3,000 won), price of the app in the U.S. and the Japanese market will automatically be $1.99 and 320 Yen.

Before the change, it was impossible to select 3,000 won in Korea and 2.99 dollars in the United States.

The price increase gap increases gradually, according to Apple. Between 400 won and 20,000 won, the tier will go up by 100 won and by 500 won in the price range between 20,000 won and 100,000 won.

Apple's closed pricing policy was the subject of complaints from the public for violating the price options of developers and putting more price pressure on customers.

Google Play Store allows developers to freely choose prices between 70 won and 450,000 won.

The minimum and maximum prices have been amended as the lowest price tier dropped to 400 won from the previous 500 won, while the highest price tier increased from the previous 1.49 million won to 16 million won.

Developers will also be able to set prices for 175 different countries and 45 different currencies. An option for automatic conversion is available. When a price is selected for one currency, the other 44 currencies can also be automatically converted.

It is also anticipated the new policy will make prices lower for those who had purchased the same application at a higher price due to the pricing tier system.

For instance, the price of Kakao Emoticon on Google Play Store is 2,500 won, while in the Apple App Store, it is 3,000 won.

“Once the policy is implemented, there will be many price promotions taking place,” said a spokesperson from a large developer. “Developers will be able to respond flexibly to the currency change, leading to higher sales for applications that are high in sales globally.”

Apple said last month it will fix its commission policy after a series of investigations on the company by Korea’s antitrust regulators for overcharging local app developers.

The company has been taking 33 percent as commission despite the in-app purchase commission rate being set as 30 percent on Apple’s App store, collecting commission from the gross amount including 10 percent value-added-tax.

BY KIM JUNG-MIN, CHO JUNG-WOO [cho.jungwoo1@joongang.co.kr]