11 ms·

Apple’s UK App Store prices will rise 25% following Brexit currency fluctuations

110 points by rloc 10y ago

tveita 10y ago
"While critics might note that Apple’s price increase is greater than the pound’s loss in value, financial analysts predict that the market still hasn’t fully priced in the cost of Brexit — that is to say the pound still has further to fall." So what mechanisms keep the price from instantly dropping if "everyone" agrees it should be lower? Market inefficiencies? Or lots of money betting on an upswing?
- easytiger 10y ago
  > "While critics might note that Apple’s price increase is greater than the pound’s loss in value, financial analysts predict that the market still hasn’t fully priced in the cost of Brexit — that is to say the pound still has further to fall." Someone should probably tell the worlds biggest futures exchange that their forward rate for GBPUSD is wrong then: http://www.cmegroup.com/trading/fx/g10/british-pound.html http://www.cmegroup.com/trading/fx/g10/british-pound.html Methinks someone is talking nonsense > o what mechanisms keep the price from instantly dropping if "everyone" agrees it should be lower? It would drop. It hasn't, because that is not what the "experts" consensus is
  - andysinclair 10y ago
    Forward prices are not a predictor, they are simply based on interest rate differentials between two currencies.
  - tomarr 10y ago
    Not necessarily - the market has priced in multiple future outcomes according to their probability, each which see a massively different valuation of pound sterling. Article 50/hard Brexit/etc. is now very likely (lower pound sterling value), but there’s still the potential of a late change to this approach or a parliament refusal of the bill (higher pound sterling value).
    - notahacker 10y ago
      And of course it suits Apple to focus on the highest probability event, particularly since (unlike FX traders) they don't stand to very quickly lose large amounts of money if low probability but cannot be ruled out yet positive news for the pound happens. The worst case scenario for Apple if the pound rebounds involves people thinking their UK App Store is a bit overpriced until they revise prices again.
  - noja 10y ago
    GBP/USD is listed as "strong sell" on https://uk.investing.com/currencies/gbp-usd-contracts https://uk.investing.com/currencies/gbp-usd-contracts (right panel) Earlier today it was "strong buy".
- jstanley 10y ago
  The market has always priced in all of the information that is available to its participants. The "financial analysts" are talking nonsense basically. If they're so sure it's going to drop further they should short the pound now, as much as they can. That in itself would cause the pound to drop, and then whatever effect they're predicting would be priced in.
  - simonh 10y ago
    No, for several reasons. You might be sure that the value will fall but not know when. There might be short term risks that might make now a sub-optimal time to make that bet. There might be other effects that might mitigate this particular effect - so you might be convinced that Brexit will drive down the pound compared the the value it might otherwise have had, but not know what that price driven by other factors might be. Government intervention might mitigate the effect - George Soros made a fortune betting against the government but many others have lost fortunes the same way. The trading floors eat naive market perfectionists for breakfast.
  - deleted 10y ago
    [deleted]
- mattmanser 10y ago
  Are these the same financial analysts that said there was going to be an immediate meltdown post-brexit?
  - simonh 10y ago
    We aren't post-brexit yet. That's more than 2 years away.
    - misnome 10y ago
      And, in fact, the talk the past few days from Phillip Hammond/the leaks is that there will be a collapse in the economy ("short term" is a euphemism that can cover just about anything. Short term, the sun will expand and melt the earth).
    - andy_ppp 10y ago
      In the mean time lots of money to be made raising and lowering the price of the pound based on various announcements. I'm writing a bot that shorts on Donald Trumps tweeting company names...
    - mattmanser 10y ago
      I should have been clearer, the analysts said there would be an immediate meltdown in the UK economy after the brexit vote if it was leave. That forecast was completely wrong, the opposite has happened. As it's widely been reported in the UK, in both lefty and righty papers, I'm surprised you've failed to see it. It's been mentioned every time we get a positive growth figure, or an unemployment fall, or whatever.
      - TillE 10y ago
        Yes, predicting fuzzy emotional reactions to uncertainty is a lot harder than the analyzing the clear, solid legal and economic changes which are to come.
      - simonh 10y ago
        As has been mentioned on this thread before you posted, those analyses were based on the announced policy that article 50 would be triggered immediately. It wasn't. Long term Brexit is absolutely going to be disastrous for the UK economy, unless parliament can get us on to a soft-brexit EEA membership track. The tragedy is that the British economy was going well through the beginning of 2016 and after a bumpy road immediately after the vote that momentum has held up over the last 6 months. That won't help us if we really do crash out of the EU hard.
- chki 10y ago
  Isn't that just the fundamental problem with financial analysts? If they were always right they could be really rich really quick. But I've never heard of that..
- simonh 10y ago
  > ...Apple’s price increase is greater than the pound’s loss in value... It's 5% more than the pound's loss in value next to the Dollar. But bear in mind that for the last 6 months Apple has simply swallowed a 20% reduction in their (and developers) UK App Store revenue. Look at it that way and we in the UK have enjoyed subsidized prices for most of the last year.
  - spuz 10y ago
    If that's true it would suggest that Apple are not in fact basing their price on expected further devaluations of the pound vs the dollar. So either they don't expect the price to fall further, or they do expect it to fall further but don't want to burden their UK customers with even higher prices at the moment.
    - simonh 10y ago
      Or they are aligning their prices against a psychologically meaningful breakpoint such as the increase from £7.99 to £9.99 given in the article, which happens to be about 25%, rather than a precisely 20% increase which would yield a price of £9.59. People here are reading way more into that 5% than is remotely warranted and for ludicrously incidental reasons. What's actually happening here is very simple. Apple has been taking a hit for a while. They are re-aligning prices to the nearest logical breakpoint. That's it. All that analyst guff about Brexit downside risks because of a slight percentage discrepancy with exchange rates is just because analysts don't know crap about the real reason - marketing.
      - tlrobinson 10y ago
        Uh 25% increase only leads to round prices at certain points. 25% increase on £1 is £1.25... Otherwise I agree with you.
        simonh 10y ago
        They increased the basic price 'unit' from £0.79 to £0.99. Although at higher price points they use a 'unit' of £1.49 that's now changed to £1.99. Apple uses prices aligned to multiples of these units, with some rounding. So when Apple realigns UK prices to take into account currency fluctuations, they do so based on a combination of how much and how long the exchange rate has changed, and what their target price units and price points are. Also I'm sure they factor in holiday season timing to e.g. avoid negative publicity running up to Christmas.
- bertil 10y ago
  > So what mechanisms keep the price from instantly dropping if "everyone" agrees it should be lower? Market inefficiencies? Or lots of money betting on an upswing? Asymmetric uncertainty: some people believe there is a small chance that things could change for the better; in that case, the market will go up spectacularly and Apple will update their prices again. If that doesn’t happen, Apple doesn’t have to change their price again, which is, I presume, a fairly costly operation — but the equilibrium rate with an effective Brexit is lower than where it is now. Once such situation is if the Parliament refuses to approve the referendum: Courts have rules their vote is needed, and most MPs were against Brexit beforehand.
dazc 10y ago
"This latest round of price changes doesn’t just affect the UK (customers in India and Turkey are also going to see increases).." OK, '25 percent due to Brexit' is going to get more clicks.
- huxley 10y ago
  Not really, Brexit is the proximate cause for the change in pricing in the UK (since Apple has concerns about currency instability) but that doesn't mean other countries aren't also going to see pricing changes that are unrelated to Brexit. Apple sometimes eats the currency difference but if they think the currency value will trend down they generally don't.
  - camus2 10y ago
    Apple is full of it. 5/7 years ago it was cheaper to fly to New York from Paris, buy a Macbook Pro there and come back since the dollar was pretty low. And you still had money left! Of course they don't care about the exchange rates when they can charge the same price NUMBER in Euro and in Dollars despite the difference. They also overcharge for UK, the "localisation cost" excuse doesn't fly here. I'm glad time have changed and there is less fanboism from Apple evangelists online. Their arguments were just obnoxious.
    - misnome 10y ago
      Really? Exactly when was that the case? I know that dollars = pounds/euros is usually how it works, but the disparity is never quite as large when you consider both the currency valuations and the fact that the price never includes tax.
      - croon 10y ago
        I can verify the claim, but can't point to specific years. That was however not specifically Apple, but merely electronics in general. I used to import hardware parts through an American friend when he came to visit because it was so much cheaper, and I would say it was more than 5 years ago. Now the difference is negligible.
hacker_9 10y ago
I don't like prices increasing as much as anyone, but if this gets people to stop and think before buying Apple products then I'm all for it. They have been overcharging for their products for the last 10 years.
- simonh 10y ago
  So you think the way to stop Apple overcharging is for Apple to overcharge even more? Look, if you just don't want anybody to buy Apple products at all, irrespective of the price, just say so. Bear in Mind Apple have been eating the post-Brexit drop in their UK revenues with no price rises for the last 6 months.
  - freehunter 10y ago
    If you firmly believe that people are choosing to go against their best interests, it's not a far stretch to think that going even further from their best interests would snap them out of it, make them learn their lesson. It's winter here right now and I'll admit to seeing my neighbor's sidewalk covered in snow and ice and thinking "well when someone falls and sues them, they'll finally learn to clean it". So if the parent believes that Apple is overcharging but consumers just aren't seeing it properly, maybe if they overcharge even more, consumers will finally realize they've been bamboozled the whole time.
  - deleted 10y ago
    [deleted]
- j4kp07 10y ago
  News Flash: Developers set the prices for their apps. Not Apple.
  - andyjohnson0 10y ago
    Not really. Developers choose a pricing tier for their apps. Apple sets the price of apps in each tier for each currency they support.
EasyTiger_ 10y ago
Will this affect Apple Music subscription? If so then I'm out.
- k-mcgrady 10y ago
  I don't think they can change that without big consequences. A 9.99 price point is pretty important which is evident given that it costs $9.99 and £9.99 and €9.99.
rrggrr 10y ago
Eurozone debt-to-GDP: 92%. This is BEFORE one considers (a) member country debt, (b) troubled bank liabilities which EU must backstop (eg. Deutchebank), and (c) immense social, security and defense costs which EU nations must incur due to recent global events. By contrast UK debt-to-GDP: 90% and falling, and a US-UK trade deal is likely very soon. I'd rather own Sterling.
- tonyedgecombe 10y ago
  Before the last election the pound was close to $1.65, after the election it started falling and currently the sentiment is we are heading for a hard brexit. I suspect it has found it's new level.
  - simonh 10y ago
    Until that level changes again. Markets are not and never have been perfectly efficient. This is why traders are able to make money - they use information at their disposal that indicates the market value is incorrect to trade against that value. By definition if the market value was always correct that wouldn't be possible. So there is a feedback mechanism from information to market values, but there are many reasons those mechanisms might not work. There might be other more attractive targets for money that would otherwise be used to take advantage of that information. There might be a lack of liquidity preventing funds being deployed at all. There might be short term risks deterring long term bets on accepted trends. Imagine if half the currency traders in the world stopped trading. All of a sudden all of those inputs into currency prices would no longer exist. Would currency prices continue being traded in exactly the same way and weeks or months later be at exactly the same value they would have been before? No, because losing all those inputs into the market would reduce the information flow that drives market value. To look at the opposite case, does the world have the ultimate possible expression of the ideal set of perfect currency traders using perfect information? Probably not, so the market value probably isn't what it would be if there were, i.e. the current market prices probably isn't at it's perfect ideal value.
    - tonyedgecombe 10y ago
weavie 10y ago
I haven't checked (I don't make enough from it to get excited about it) but presumably my income from the app store from the rest of the world should also increase. Does Apple work out my revenue in Dollars and then convert to GBP at the exchange rate at the time of payment?
- graeme 10y ago
  I imagine they do, if they're like most other multi-currency platforms. If the license terms are on a percent of revenue basis, they'd more or less have to.
quotha 10y ago
So the pound is soaring higher this morning.. they will have to cut prices!
- TillE 10y ago
  So much higher: http://www.xe.com/currencycharts/?from=GBP&to=USD&view=2Y http://www.xe.com/currencycharts/?from=GBP&to=USD&view=2Y
  - quotha 10y ago
    a 2 year chart!? check the 1 day chart. or ok let's see where it is in another 2 years.
- seanalltogether 10y ago
  Call me crazy but I think some entity is trying to manipulate the market in the short term here. By all reason the Pound should be falling even further with the increased uncertainty of a hard brexit and leaving the single market, instead someone out there is buying up as much as they can. Somethings not right.
ianamartin 10y ago
This is a great example of when to not use percentages in a headline. Or, you know, go for it! If you're trying to get clicks.
- ojm 10y ago
  Did the prices rise by 25% in GBP or not?
  - ianamartin 10y ago
    Did the price of anything go up by 25% in GBP or not? In this case, 25% doesn't matter. It's literally not a big deal. It's 50 pence. There's another point to be made here that goes along the same lines as this horse-crap. It's this: shit it going to get weird when brexit happens. Well, we don't know that yet. It's probably true, but we don't know for a fact yet. But people post shit like this with bullshit click-bait titles, and then who knows what happens next? Why don't you just stop? Why don't you fuck off until you know something for real is going to happen?
- hellogoodbyeeee 10y ago
  Could you elaborate? I don't understand what is wrong with the headline being a fact.
  - ianamartin 10y ago
    I will elaborate. Percentages are not good measures of small quantities. 25 percent of zero is still zero. It's not a meaningful number. If you're dealing with small amounts, use small amounts. This is junk.
    - hellogoodbyeeee 10y ago
      The problem is that apps in the app store have a variety of price points from $1 to $10 and they are all increasing 25%. Would you rather the title of the article be a table that maps the quantity of increase for each price point?
ronnier 10y ago
It looks like the GBP has been in decline for years. Here's the last 10 years: http://www.xe.com/currencycharts/?from=GBP&to=USD&view=10Y http://www.xe.com/currencycharts/?from=GBP&to=USD&view=10Y
- pawadu 10y ago
  Yes, but you can also see the decline rate increased significantly after Brexit. (not that currency exchange rate is by any means a health indicator)
- pmontra 10y ago
  The GBP has been pretty stable against the dollar in normal times. The graph shows two discontinuities: the 2008 crisis and Brexit. There was a stable level at 1.95 in 2007-2008, then a drop and a sinusoid around 1.55 for 8 years, then another drop to lower levels after Brexit. We'll see where it goes from there.
csours 10y ago
Globalization generally makes things cheaper and easier for consumers, but will also reduce employment in certain areas. Restoring that employment is a separate track than reducing globalization - that is to say: you can de-globalize and exit whatever trade treaties you like, but those jobs you lost to globalization will not magically come back. Citizens have been sold a bill of goods in both directions when experts and politicians under-report the side effects and exaggerate the benefits.
- HeavenBanned 10y ago
  So then how do you stop the bleeding in the form of lost jobs to near slave-wage labor?
  - csours 10y ago
    That is a very good question, and one that I wish more people would ask and consider the implications. I don't know the answer to that question; I think most economists would tell you that you cannot and you should not try. Many people talk about "job creation", but a lot of what we hear about job creation is political mumbo jumbo tax reduction bullshit. Here are a few things that may help job creation from a political or government point of view: 1. Municipalities, State, and the Federal government should rationalize their requirements for starting and running a business. The US is already much better about this than other countries, but reducing bureaucratic friction is always good. This doesn't mean less government, it means smarter government. 2. One quick hit job creator is government infrastructure spending. The US did this after 2008, and so far it's turned out pretty well! 3. In the future there may be fewer jobs. Society needs to start seriously considering localized post-scarcity economies.

110 points by rloc 10y ago

"While critics might note that Apple’s price increase is greater than the pound’s loss in value, financial analysts predict that the market still hasn’t fully priced in the cost of Brexit — that is to say the pound still has further to fall." So what mechanisms keep the price from instantly dropping if "everyone" agrees it should be lower? Market inefficiencies? Or lots of money betting on an upswing?

easytiger 10y ago
> "While critics might note that Apple’s price increase is greater than the pound’s loss in value, financial analysts predict that the market still hasn’t fully priced in the cost of Brexit — that is to say the pound still has further to fall." Someone should probably tell the worlds biggest futures exchange that their forward rate for GBPUSD is wrong then: http://www.cmegroup.com/trading/fx/g10/british-pound.html http://www.cmegroup.com/trading/fx/g10/british-pound.html Methinks someone is talking nonsense > o what mechanisms keep the price from instantly dropping if "everyone" agrees it should be lower? It would drop. It hasn't, because that is not what the "experts" consensus is
- andysinclair 10y ago
  Forward prices are not a predictor, they are simply based on interest rate differentials between two currencies.
- tomarr 10y ago
  Not necessarily - the market has priced in multiple future outcomes according to their probability, each which see a massively different valuation of pound sterling. Article 50/hard Brexit/etc. is now very likely (lower pound sterling value), but there’s still the potential of a late change to this approach or a parliament refusal of the bill (higher pound sterling value).
  - notahacker 10y ago
    And of course it suits Apple to focus on the highest probability event, particularly since (unlike FX traders) they don't stand to very quickly lose large amounts of money if low probability but cannot be ruled out yet positive news for the pound happens. The worst case scenario for Apple if the pound rebounds involves people thinking their UK App Store is a bit overpriced until they revise prices again.
- noja 10y ago
  GBP/USD is listed as "strong sell" on https://uk.investing.com/currencies/gbp-usd-contracts https://uk.investing.com/currencies/gbp-usd-contracts (right panel) Earlier today it was "strong buy".
jstanley 10y ago
The market has always priced in all of the information that is available to its participants. The "financial analysts" are talking nonsense basically. If they're so sure it's going to drop further they should short the pound now, as much as they can. That in itself would cause the pound to drop, and then whatever effect they're predicting would be priced in.
- simonh 10y ago
  No, for several reasons. You might be sure that the value will fall but not know when. There might be short term risks that might make now a sub-optimal time to make that bet. There might be other effects that might mitigate this particular effect - so you might be convinced that Brexit will drive down the pound compared the the value it might otherwise have had, but not know what that price driven by other factors might be. Government intervention might mitigate the effect - George Soros made a fortune betting against the government but many others have lost fortunes the same way. The trading floors eat naive market perfectionists for breakfast.
- deleted 10y ago
  [deleted]
mattmanser 10y ago
Are these the same financial analysts that said there was going to be an immediate meltdown post-brexit?
- simonh 10y ago
  We aren't post-brexit yet. That's more than 2 years away.
  - misnome 10y ago
    And, in fact, the talk the past few days from Phillip Hammond/the leaks is that there will be a collapse in the economy ("short term" is a euphemism that can cover just about anything. Short term, the sun will expand and melt the earth).
  - andy_ppp 10y ago
    In the mean time lots of money to be made raising and lowering the price of the pound based on various announcements. I'm writing a bot that shorts on Donald Trumps tweeting company names...
  - mattmanser 10y ago
    I should have been clearer, the analysts said there would be an immediate meltdown in the UK economy after the brexit vote if it was leave. That forecast was completely wrong, the opposite has happened. As it's widely been reported in the UK, in both lefty and righty papers, I'm surprised you've failed to see it. It's been mentioned every time we get a positive growth figure, or an unemployment fall, or whatever.
    - TillE 10y ago
      Yes, predicting fuzzy emotional reactions to uncertainty is a lot harder than the analyzing the clear, solid legal and economic changes which are to come.
    - simonh 10y ago
      As has been mentioned on this thread before you posted, those analyses were based on the announced policy that article 50 would be triggered immediately. It wasn't. Long term Brexit is absolutely going to be disastrous for the UK economy, unless parliament can get us on to a soft-brexit EEA membership track. The tragedy is that the British economy was going well through the beginning of 2016 and after a bumpy road immediately after the vote that momentum has held up over the last 6 months. That won't help us if we really do crash out of the EU hard.
chki 10y ago
Isn't that just the fundamental problem with financial analysts? If they were always right they could be really rich really quick. But I've never heard of that..
simonh 10y ago
> ...Apple’s price increase is greater than the pound’s loss in value... It's 5% more than the pound's loss in value next to the Dollar. But bear in mind that for the last 6 months Apple has simply swallowed a 20% reduction in their (and developers) UK App Store revenue. Look at it that way and we in the UK have enjoyed subsidized prices for most of the last year.
- spuz 10y ago
  If that's true it would suggest that Apple are not in fact basing their price on expected further devaluations of the pound vs the dollar. So either they don't expect the price to fall further, or they do expect it to fall further but don't want to burden their UK customers with even higher prices at the moment.
  - simonh 10y ago
    Or they are aligning their prices against a psychologically meaningful breakpoint such as the increase from £7.99 to £9.99 given in the article, which happens to be about 25%, rather than a precisely 20% increase which would yield a price of £9.59. People here are reading way more into that 5% than is remotely warranted and for ludicrously incidental reasons. What's actually happening here is very simple. Apple has been taking a hit for a while. They are re-aligning prices to the nearest logical breakpoint. That's it. All that analyst guff about Brexit downside risks because of a slight percentage discrepancy with exchange rates is just because analysts don't know crap about the real reason - marketing.
    - tlrobinson 10y ago
      Uh 25% increase only leads to round prices at certain points. 25% increase on £1 is £1.25... Otherwise I agree with you.
      - simonh 10y ago
        They increased the basic price 'unit' from £0.79 to £0.99. Although at higher price points they use a 'unit' of £1.49 that's now changed to £1.99. Apple uses prices aligned to multiples of these units, with some rounding. So when Apple realigns UK prices to take into account currency fluctuations, they do so based on a combination of how much and how long the exchange rate has changed, and what their target price units and price points are. Also I'm sure they factor in holiday season timing to e.g. avoid negative publicity running up to Christmas.
bertil 10y ago
> So what mechanisms keep the price from instantly dropping if "everyone" agrees it should be lower? Market inefficiencies? Or lots of money betting on an upswing? Asymmetric uncertainty: some people believe there is a small chance that things could change for the better; in that case, the market will go up spectacularly and Apple will update their prices again. If that doesn’t happen, Apple doesn’t have to change their price again, which is, I presume, a fairly costly operation — but the equilibrium rate with an effective Brexit is lower than where it is now. Once such situation is if the Parliament refuses to approve the referendum: Courts have rules their vote is needed, and most MPs were against Brexit beforehand.

dazc 10y ago

"This latest round of price changes doesn’t just affect the UK (customers in India and Turkey are also going to see increases).." OK, '25 percent due to Brexit' is going to get more clicks.

huxley 10y ago
Not really, Brexit is the proximate cause for the change in pricing in the UK (since Apple has concerns about currency instability) but that doesn't mean other countries aren't also going to see pricing changes that are unrelated to Brexit. Apple sometimes eats the currency difference but if they think the currency value will trend down they generally don't.
- camus2 10y ago
  Apple is full of it. 5/7 years ago it was cheaper to fly to New York from Paris, buy a Macbook Pro there and come back since the dollar was pretty low. And you still had money left! Of course they don't care about the exchange rates when they can charge the same price NUMBER in Euro and in Dollars despite the difference. They also overcharge for UK, the "localisation cost" excuse doesn't fly here. I'm glad time have changed and there is less fanboism from Apple evangelists online. Their arguments were just obnoxious.
  - misnome 10y ago
    Really? Exactly when was that the case? I know that dollars = pounds/euros is usually how it works, but the disparity is never quite as large when you consider both the currency valuations and the fact that the price never includes tax.
    - croon 10y ago
      I can verify the claim, but can't point to specific years. That was however not specifically Apple, but merely electronics in general. I used to import hardware parts through an American friend when he came to visit because it was so much cheaper, and I would say it was more than 5 years ago. Now the difference is negligible.

hacker_9 10y ago

I don't like prices increasing as much as anyone, but if this gets people to stop and think before buying Apple products then I'm all for it. They have been overcharging for their products for the last 10 years.

simonh 10y ago
So you think the way to stop Apple overcharging is for Apple to overcharge even more? Look, if you just don't want anybody to buy Apple products at all, irrespective of the price, just say so. Bear in Mind Apple have been eating the post-Brexit drop in their UK revenues with no price rises for the last 6 months.
- freehunter 10y ago
  If you firmly believe that people are choosing to go against their best interests, it's not a far stretch to think that going even further from their best interests would snap them out of it, make them learn their lesson. It's winter here right now and I'll admit to seeing my neighbor's sidewalk covered in snow and ice and thinking "well when someone falls and sues them, they'll finally learn to clean it". So if the parent believes that Apple is overcharging but consumers just aren't seeing it properly, maybe if they overcharge even more, consumers will finally realize they've been bamboozled the whole time.
- deleted 10y ago
  [deleted]
j4kp07 10y ago
News Flash: Developers set the prices for their apps. Not Apple.
- andyjohnson0 10y ago
  Not really. Developers choose a pricing tier for their apps. Apple sets the price of apps in each tier for each currency they support.

EasyTiger_ 10y ago

Will this affect Apple Music subscription? If so then I'm out.

k-mcgrady 10y ago
I don't think they can change that without big consequences. A 9.99 price point is pretty important which is evident given that it costs $9.99 and £9.99 and €9.99.

rrggrr 10y ago

Eurozone debt-to-GDP: 92%. This is BEFORE one considers (a) member country debt, (b) troubled bank liabilities which EU must backstop (eg. Deutchebank), and (c) immense social, security and defense costs which EU nations must incur due to recent global events. By contrast UK debt-to-GDP: 90% and falling, and a US-UK trade deal is likely very soon. I'd rather own Sterling.

tonyedgecombe 10y ago
Before the last election the pound was close to $1.65, after the election it started falling and currently the sentiment is we are heading for a hard brexit. I suspect it has found it's new level.
- simonh 10y ago
  Until that level changes again. Markets are not and never have been perfectly efficient. This is why traders are able to make money - they use information at their disposal that indicates the market value is incorrect to trade against that value. By definition if the market value was always correct that wouldn't be possible. So there is a feedback mechanism from information to market values, but there are many reasons those mechanisms might not work. There might be other more attractive targets for money that would otherwise be used to take advantage of that information. There might be a lack of liquidity preventing funds being deployed at all. There might be short term risks deterring long term bets on accepted trends. Imagine if half the currency traders in the world stopped trading. All of a sudden all of those inputs into currency prices would no longer exist. Would currency prices continue being traded in exactly the same way and weeks or months later be at exactly the same value they would have been before? No, because losing all those inputs into the market would reduce the information flow that drives market value. To look at the opposite case, does the world have the ultimate possible expression of the ideal set of perfect currency traders using perfect information? Probably not, so the market value probably isn't what it would be if there were, i.e. the current market prices probably isn't at it's perfect ideal value.
  - tonyedgecombe 10y ago

weavie 10y ago

I haven't checked (I don't make enough from it to get excited about it) but presumably my income from the app store from the rest of the world should also increase. Does Apple work out my revenue in Dollars and then convert to GBP at the exchange rate at the time of payment?

graeme 10y ago
I imagine they do, if they're like most other multi-currency platforms. If the license terms are on a percent of revenue basis, they'd more or less have to.

quotha 10y ago

So the pound is soaring higher this morning.. they will have to cut prices!

TillE 10y ago
So much higher: http://www.xe.com/currencycharts/?from=GBP&to=USD&view=2Y http://www.xe.com/currencycharts/?from=GBP&to=USD&view=2Y
- quotha 10y ago
  a 2 year chart!? check the 1 day chart. or ok let's see where it is in another 2 years.
seanalltogether 10y ago
Call me crazy but I think some entity is trying to manipulate the market in the short term here. By all reason the Pound should be falling even further with the increased uncertainty of a hard brexit and leaving the single market, instead someone out there is buying up as much as they can. Somethings not right.

ianamartin 10y ago

This is a great example of when to not use percentages in a headline. Or, you know, go for it! If you're trying to get clicks.

ojm 10y ago
Did the prices rise by 25% in GBP or not?
- ianamartin 10y ago
  Did the price of anything go up by 25% in GBP or not? In this case, 25% doesn't matter. It's literally not a big deal. It's 50 pence. There's another point to be made here that goes along the same lines as this horse-crap. It's this: shit it going to get weird when brexit happens. Well, we don't know that yet. It's probably true, but we don't know for a fact yet. But people post shit like this with bullshit click-bait titles, and then who knows what happens next? Why don't you just stop? Why don't you fuck off until you know something for real is going to happen?
hellogoodbyeeee 10y ago
Could you elaborate? I don't understand what is wrong with the headline being a fact.
- ianamartin 10y ago
  I will elaborate. Percentages are not good measures of small quantities. 25 percent of zero is still zero. It's not a meaningful number. If you're dealing with small amounts, use small amounts. This is junk.
  - hellogoodbyeeee 10y ago
    The problem is that apps in the app store have a variety of price points from $1 to $10 and they are all increasing 25%. Would you rather the title of the article be a table that maps the quantity of increase for each price point?

ronnier 10y ago

It looks like the GBP has been in decline for years. Here's the last 10 years: http://www.xe.com/currencycharts/?from=GBP&to=USD&view=10Y http://www.xe.com/currencycharts/?from=GBP&to=USD&view=10Y

pawadu 10y ago
Yes, but you can also see the decline rate increased significantly after Brexit. (not that currency exchange rate is by any means a health indicator)
pmontra 10y ago
The GBP has been pretty stable against the dollar in normal times. The graph shows two discontinuities: the 2008 crisis and Brexit. There was a stable level at 1.95 in 2007-2008, then a drop and a sinusoid around 1.55 for 8 years, then another drop to lower levels after Brexit. We'll see where it goes from there.

csours 10y ago

Globalization generally makes things cheaper and easier for consumers, but will also reduce employment in certain areas. Restoring that employment is a separate track than reducing globalization - that is to say: you can de-globalize and exit whatever trade treaties you like, but those jobs you lost to globalization will not magically come back. Citizens have been sold a bill of goods in both directions when experts and politicians under-report the side effects and exaggerate the benefits.

HeavenBanned 10y ago
So then how do you stop the bleeding in the form of lost jobs to near slave-wage labor?
- csours 10y ago
  That is a very good question, and one that I wish more people would ask and consider the implications. I don't know the answer to that question; I think most economists would tell you that you cannot and you should not try. Many people talk about "job creation", but a lot of what we hear about job creation is political mumbo jumbo tax reduction bullshit. Here are a few things that may help job creation from a political or government point of view: 1. Municipalities, State, and the Federal government should rationalize their requirements for starting and running a business. The US is already much better about this than other countries, but reducing bureaucratic friction is always good. This doesn't mean less government, it means smarter government. 2. One quick hit job creator is government infrastructure spending. The US did this after 2008, and so far it's turned out pretty well! 3. In the future there may be fewer jobs. Society needs to start seriously considering localized post-scarcity economies.