Why Geography Should Determine App Pricing – Knowligent
Why Geography Should Determine App Pricing

Why Geography Should Determine App Pricing

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A phone app or a software tool for your computer costs the same in Africa as in the US and Europe, and yet average wages are not even close.

Should apps really cost the same everywhere? When the average wage is only $300, charging $60 for a video game makes no sense. And yet that’s how it works. Lowering prices to better reflect local purchasing power is not only morally better, it’s good for business and can help combat piracy.

“When I look at someone in, say, Bangladesh, who makes about the same amount in a day as I make every minute I’m alive,” music software developer Chris Randall wrote on Twitter, “I’m essentially asking them to pay the same amount for [our Dubstation app] as I paid for my Prophet 10 [a $4,300 synthesizer]. That just doesn’t seem right to me.”

Regional pricing, or localized pricing, is not new. The Big Mac Index, introduced in the Economist in 1986, compares the price of the limp, soggy hamburger in different countries. On December 3, for example, a Big Mac in Sweden cost the equivalent of $6.23, while in Egypt it was just $2.68.