The Fiksu Blog

Why iOS App Marketers Should Care About Exchange Rates

Most US Apple app developers understand that for every $0.99 purchase on iTunes, they make $0.70, a 70% cut. However, for international sales, that percentage varies due to a few factors

  1. Apple has a tiered pricing & commision structure for all purchases, and this structure is different for each country’s currency. For instance:
    currency-apple
  2. Apple converts other currencies into the developer’s currency using the exchange rate at time of payout
  3. Apple’s pricing matrix is not updated in real-time

Given this, if exchange rates fluctuate (as they always will), US developers may not make 70% USD cuts for a given currency’s pricing tier. For instance, as the pricing matrix indicates, a tier 1 $0.99 sale in Canada will net $0.70 in CAD. With the current exchange rate ($0.91 USD for $1 CAD), Apple will payout only $0.64 to the developer. Therefore, absolute US revenue is about 10% less for a same-tier CAD purchase.

It’s not all negative, though (go USD!). The New Zealand Dollar nets $0.76 for a Tier 1 sale; the Euro $0.76; and the AUD $0.75. All are more than the expected 70% cut.

The currencies where developers are most affected are the Russian Rubble ($0.63), Hong Kong Dollar ($0.64), British Pound ($0.64), Swedish Krona ($0.64), and CAD.

Whether positive or negative, the discrepancy is still within 10% for all currencies. Barring any surprising swings in exchange rate for USD, these discrepencies shouldn’t fluctuate too far out of this range.

What this means for advertisers: Not much, except that if you are doing international advertising, you may want to watch exchange rates as you determine ideal CPI targets. If the USD becomes 5% stronger against the AUD, your payout from AUD purchases goes up, which means your ARPU from these users increases, which means you can bid more for the same ROI. Do we recommend this micro-management? Probably not — but it is one way to improve absolute revenue. Indeed, if you are buying at scale, even a 1% change could have a noticeable impact on revenue.

Be careful, though: Apple does update these charts periodically, including some countries within the past few weeks. This is more of a once/twice a year change, however, rather than a monthly one.

currency-chart