This is Garrett Murray's Maniacal Rage

When you sell an application in the iTunes App Store, you have to choose a “tier” of pricing, based on the US dollar amount you want to charge customers. Tier 1 is 99¢, Tier 2 is $1.99, and so on. Fine. Sure, it’s more complicated than, say, entering “1.99” in a text field, but whatever.

Along with the price in USD, each tier has pre-defined prices for other countries your application will be available in. So when you choose Tier 2—as I did—to charge your customers $1.99, Apple tells you how much your application will cost in other countries based on the currency equivalent of $1.99 USD.

You receive 70% of the sale of each application. In my case, $1.40 per sale. Great. That’s easy math. No matter where in the world my application is sold, I’ll receive 70% of the value of $1.99 USD in the local currency. Or at least I would think so.

Currently, my Tier 2 application sells for 1.59€ in EU countries, and I receive 0.97€ for each sale. But 70% of 1.56€ would be 1.11€. Why do I get 0.97€? This is the case in other countries, where my profit percentage can be as low as 60% (UK). Why am I not being given the full 70% in every country? I seem to remember Steve Jobs, on stage, saying 70% of the revenue goes to the developer (background dimmed to highlight important bullet):

This difference means that for each sale in the EU, I receive 0.97€, which is only currently $1.30 USD. I make 10¢ less on every sale in the EU, or 14% less profit.

And that’s not the worst discrepancy. Currently, my application sells for £1.19 in the UK. For each sale, I receive £0.72, which is currently $1.08 USD. That means I lose 32¢ on every sale in the UK, or nearly 23% of my profit.

Let’s imagine, for a moment, that I sold 5,000 copies of my application in the UK (I didn’t, but let’s pretend I did). I would make £3,600, or $5,409.24 USD. If I sold the same 5,000 copies in the US, I would have made $7,000 USD, which is a difference of $1,590.76 USD!

It’s important to note that Apple sort of pulled a fast one here. In the financial contracts I signed, there were charts with the price tiers and country equivalents, but they appeared to be based on currency conversions made when the document was prepared. They haven’t changed, however.

Maybe I’m missing something, but it looks to me like Apple isn’t paying me what they owe me in several countries. I hope I’m wrong, but I don’t think I am.

Update: After some debate on Twitter, I’ve posted a followup to this with more thoughts and possible reasons for this difference.