​Google slashes minimum app price on Google Play in emerging markets

With an eye on new smartphone owners in emerging markets, Google has made huge cuts to the minimum price developers can charge for apps on Google Play.

The Google Play homepage. Image: ZDNet

Google has reduced minimum app prices on Google Play in a number of emerging economies to better fit local market conditions.

Google has 1.4 billion active Android users, many of whom live in emerging markets in Asia, South America and Eastern Europe with lower average incomes and therefore have less to spend on apps and games. This has left Google Play playing second fiddle on revenue to Apple's App Store despite there being fewer iPhone owners compared to Android.

In a move that might not raise revenue but likely will boost the number of Android users who pay for apps, Google has lowered price barriers in Google Play in emerging markets.

The company has more than halved the minimum price that developers in 17 nations -- including Brazil, Indonesia, Mexico, Russia and Turkey -- can charge for apps, in-app products and games. The new floor price for apps in Google Play in many of the markets is equivalent to about $0.26 or roughly a quarter of the minimum price in the US and Europe.

Google said the changed price range for apps followed a "successful pilot" in India earlier this year where it experimented with a 10 Rupee (15 cents) price minimum to encourage users to access apps sold by local developers.

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It's up to developers if they want to lower the price of their apps to the new minimum, but they'll now have more flexibility in using price to strike the right balance between revenue, access and other goals.

"Available in more than 190 countries, Google Play is a global platform for developers to build high quality apps and successful businesses. But every market has its own unique challenges and opportunities," said Google on its Android developer blog.

"Purchasing behaviour, in particular, varies significantly between markets. So to provide developers with more flexibility, we've worked to adapt Google Play pricing options to better suit local consumers and make content more accessible."

The new price range could help Google and app developers in emerging markets capture some of the growth in first-time smartphone owners taking up sub-$100 Android phones, including handsets from Google's Android One partners.

As per mobile analytics firm AppAnnie, iOS App Store revenues in Q3 2015 were about 80 percent higher than revenues on Google Play, while worldwide downloads from Google Play were 90 percent higher than from the App Store. The firm noted that first-time smartphone owners in India, Indonesia and Vietnam were driving much of that growth on Google Play.

The list of countries affected by the new minimum prices in Google Play are:

Brazil: R$ 0.99 (was R$2.00)

Chile: CLP $200.00 (was CLP $500.00)

Colombia: COP$ 800.00 (was COP$ 2000.00)

Hungary: Ft 125.00 (was Ft 225.00)

Indonesia: Rp 3,000.00 (was Rp 12,000.00)

Malaysia: RM 1.00 (was RM 3.50)

Mexico: MXN$ 5.00 (was MXN$ 9.90)

Peru: S/. 0.99 (was S/. 3.00)

Philippines: ₱15.00 (was ₱43.00)

Poland: zł1.79 (was zł2.99)

Russia: руб 15.00 (was руб 30.00)

Saudi Arabia:﷼ 0.99 (was 4.00﷼)

South Africa: R3.99 (was R10.00)

Thailand: ฿10.00 (was ฿32.00)

Turkey: ₺0.59 (was ₺2.00)

Ukraine: ₴5.00 (was ₴8.00)

Vietnam: ₫6,000 (was ₫21,000.00)

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