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Developer
QuiteSimple
Posts: 1,452
Registered: ‎11-06-2009
My Device: Torch 9810
My Carrier: WiFi

New App World Price system - win or loss?

[ Edited ]

I guess all of us have received the new BB App World price mapping file in the beginning of December. Due to reports fiasco and holidays I didn't look closer into it, but now I have few concerns about it.

 

Before an app which costs 0.99$, costs also 0.99 Euro, 0.99 GBP etc.

 

Now there is a currency conversion at fixed rate, so an 0.99$ app now costs 0.75 Euro and 0.75 GBP. Probably it is fair for the users, but this is a 25% revenue cut for the vendors. As per my stats I have about 20% of the sales in Euro and GBP, so here is the math:

25% of app price * 20% of total sales = 5% of total sales

So I will receive 5% less for December.

 

Moreover the fixed rate for Euro is 1.3541 USD, but the current rate is 1 EUR = 1.27769 USD (http://www.xe.com/ucc/convert/?Amount=1&From=USD&To=EUR) and it may go down even lower, which will mean another cut in revenue.

 

Another point to consider is the "buying power factor", i.e. users from emerging markets will pay only part of the price, i.e. instead of 0.99$ users in Peru for example will pay only $0.75.

 

 

The new system is supposed to bring more sales, but I don't see this in my stats. IMO The key to sales in emerging markets is to introduce the carrier billing, not to lower the prices.

 

Any thoughts?



"When you become a level 3 developer, you learn to communicate over the ether. I'm told that level 5 developers are ascend into a higher level of existence beyond the physical realm." gord888 @ crackberry
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Developer
smiley
Posts: 1,449
Registered: ‎07-14-2008
My Device: Z10
My Carrier: Fido

Re: New App World Price system - win or loss?

I saw that too and I was wondering how the h*ll did users pay 0.75USD only when the app is 99cent.  I don't really care as long as it converts to the sale price then i'm ok.   With the exchange rate today I still lose when transfering funds from paypal which really s*uck too.  I did change my Bango to direct bank desposite.  Just have to do it for DR now.

 

on some orders I see $1.07 is that include the sales tax price?

 

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Developer
Ebscer
Posts: 855
Registered: ‎08-31-2009
My Device: 9530, 9630, 9800, 8530, 9900, 9810, 9930, PlayBook, Dev Alpha
My Carrier: Verizon

Re: New App World Price system - win or loss?

Charging less in Euros and Pounds is arguably a change that needed to be made. We are no longer charging a premium in those countries, but it is fair enough. The idea of a "buying power factor" is more worrying to me.

 

Like you, I don't see this as resulting in any increase in sales, and therefore is just me getting paid less. To be fair though, I have not dug through these numbers in any depth.


Read my thoughts on BlackBerry Development at news.ebscer.com
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Developer
silver20
Posts: 455
Registered: ‎03-04-2011
My Device: Paper cup

Re: New App World Price system - win or loss?

[ Edited ]

In my reports it looks like they're being charged 1 GBP for an app that's 1 USD.

 

 

 

 

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Developer
QuiteSimple
Posts: 1,452
Registered: ‎11-06-2009
My Device: Torch 9810
My Carrier: WiFi

Re: New App World Price system - win or loss?

Yes, you are right, there is no change for GBP yet, it is only for Euro. So basically the loss for me would be 25% * 10% = 2.5% of total revenue (in my first post I got the wrong percent -15% instead of 25%, I have corrected it)

 

Now, about the "bying power factor" - I have filtered the purchase report to find all $0.75, $1.50, $2.25 and $3.00 (this is the "powered" price compared to the real $0.99, $1.99 etc.), it is about 7% of my total sales. So the loss would be 7% * 25% = 1.75% of total revenue.

However Indonesia alone has about 8% of my total sales, so this number does not match. Therefore I checked Indonesia sales - for carrier billing the price is in local currency IDR and not in USD. So an $0.99 app actually costs 6600 IDR, which is $0.71 (according to currency exchange rate http://www.xe.com/ucc/convert/?Amount=1&From=USD&To=IDR

 

At the end I just counted the sales from "powered" countries over 0.5% of total sales ( India, Indonesia, South Africa, India, Mexico, Turkey, Malaysia, Thailand, Russia, Brazil), it is near 20%. Estimated loss would be 20% * 25% power factor = 5% of total revenue.

 

Adding this to the loss because of new Euro prices and the loss is going to 7.5% of total revenue. A nice start for the new year :smileysad:



"When you become a level 3 developer, you learn to communicate over the ether. I'm told that level 5 developers are ascend into a higher level of existence beyond the physical realm." gord888 @ crackberry
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Developer
peter9477
Posts: 6,473
Registered: ‎12-08-2010
My Device: PlayBook, Z10
My Carrier: none

Re: New App World Price system - win or loss?

[ Edited ]

Not to start a war, but I don't see anyone using methods of analysis that are remotely meaningful in a statistically valid manner.

You're focusing on "losses", without even having enough data to know whether any increased sales in poorer countries might be because of this "buying power factor", balancing out the losses.  Or increased sales from the richer countries, for that matter.  (Edited to improve clarity.)

Does anyone have enough data (enough apps, enough sales) that they could actually put together a valid analysis on their own? I suspect not, at least not yet, since there hasn't been enough time for you to get new data to use in a valid comparison. After all, we've just had the holiday sales period go past, so you can hardly be comparing apples and oranges if you're going only on the apparent changes since they implemented this.

Again, not trying to start an argument. I just know that in my own case, it would probably be impossible to say anything yet, let alone claim conclusive results.

RIM, on the other hand, is doing this to maximize overall sales (I assume), and has the data on which to base their strategy. I could see it affecting individual developers negatively, but I just don't expect anyone can truly say they can trace back a major negative effect to this change, yet.


Peter Hansen -- (BB10 and dev-related blog posts at http://peterhansen.ca.)
Author of White Noise and Battery Guru for BB10 and for PlayBook | Get more from your battery!
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Developer
QuiteSimple
Posts: 1,452
Registered: ‎11-06-2009
My Device: Torch 9810
My Carrier: WiFi

Re: New App World Price system - win or loss?


peter9477 wrote:

You're focusing on "losses", without even having enough data to know whether any increased sales in poorer countries might be because of this "buying power factor", balancing out the losses.  Or increased sales from the richer countries, for that matter.  (Edited to improve clarity.)

Does anyone have enough data (enough apps, enough sales) that they could actually put together a valid analysis on their own? I suspect not, at least not yet, since there hasn't been enough time for you to get new data to use in a valid comparison. After all, we've just had the holiday sales period go past, so you can hardly be comparing apples and oranges if you're going only on the apparent changes since they implemented this.

Again, not trying to start an argument. I just know that in my own case, it would probably be impossible to say anything yet, let alone claim conclusive results.


Yes, you've made valid points. I base my assumptions on my own data, it is about 30 apps and I have the stats for the last months as well. There is no increase in the number of sales in the "powered" countries, at least not for me. There is almost no difference in Euro sales despite the price cut. It could be just me, since my apps are in the lower price segment ($0.99 - $2.99) where the price really doesn't matter, while vendors with expensive apps may see increase in sales.

What I definitely see as benefit is the carrier billing, it boost sales for sure. Price cut does not.

 

I'd like to start a discussion here too, not an argument. If more vendors share their data and opinion, we will have much better picture of the changes impact :smileyhappy:



"When you become a level 3 developer, you learn to communicate over the ether. I'm told that level 5 developers are ascend into a higher level of existence beyond the physical realm." gord888 @ crackberry
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Developer
Ebscer
Posts: 855
Registered: ‎08-31-2009
My Device: 9530, 9630, 9800, 8530, 9900, 9810, 9930, PlayBook, Dev Alpha
My Carrier: Verizon

Re: New App World Price system - win or loss?


peter9477 wrote:

Not to start a war, but I don't see anyone using methods of analysis that are remotely meaningful in a statistically valid manner.

You're focusing on "losses", without even having enough data to know whether any increased sales in poorer countries might be because of this "buying power factor", balancing out the losses.


You are right in that it is still too early to have any numbers to run. But even after a few months, any changes in sales from carrier billing, new device sales, or new features in the apps is likely going to drown out any changes due to "buying power factors" anyhow.

 

At the end of the day, I just have trouble believing that a 25 cent decrease in price is going to result in more sales. Most apps are selling for pocket change already.


Read my thoughts on BlackBerry Development at news.ebscer.com
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