So what mechanisms keep the price from instantly dropping if "everyone" agrees it should be lower? Market inefficiencies? Or lots of money betting on an upswing?
It's 5% more than the pound's loss in value next to the Dollar. But bear in mind that for the last 6 months Apple has simply swallowed a 20% reduction in their (and developers) UK App Store revenue. Look at it that way and we in the UK have enjoyed subsidized prices for most of the last year.
Eg: Tier 87 is automatically $1399 CAD, as long as you allow that app to be available in the Canada App Store.
Now, with that being said, I have not seen an instance of a developer or seller abusing the localization API for this purpose... meaning forcibly charging other stores for the same in-app purchase content. A separate in-app purchase would have to be made in any case for other stores to route to. Apple has a pretty firm fist and I imagine location abuse like this may lead to the seller's account being banned or punished. It may be perfectly allowed however, I haven't dug too deep into the TOS.
People here are reading way more into that 5% than is remotely warranted and for ludicrously incidental reasons. What's actually happening here is very simple. Apple has been taking a hit for a while. They are re-aligning prices to the nearest logical breakpoint. That's it. All that analyst guff about Brexit downside risks because of a slight percentage discrepancy with exchange rates is just because analysts don't know crap about the real reason - marketing.
Otherwise I agree with you.
Apple uses prices aligned to multiples of these units, with some rounding. So when Apple realigns UK prices to take into account currency fluctuations, they do so based on a combination of how much and how long the exchange rate has changed, and what their target price units and price points are. Also I'm sure they factor in holiday season timing to e.g. avoid negative publicity running up to Christmas.
Someone should probably tell the worlds biggest futures exchange that their forward rate for GBPUSD is wrong then:
http://www.cmegroup.com/trading/fx/g10/british-pound.html
Methinks someone is talking nonsense
> o what mechanisms keep the price from instantly dropping if "everyone" agrees it should be lower?
It would drop. It hasn't, because that is not what the "experts" consensus is
Earlier today it was "strong buy".
The "financial analysts" are talking nonsense basically. If they're so sure it's going to drop further they should short the pound now, as much as they can. That in itself would cause the pound to drop, and then whatever effect they're predicting would be priced in.
Asymmetric uncertainty: some people believe there is a small chance that things could change for the better; in that case, the market will go up spectacularly and Apple will update their prices again. If that doesn’t happen, Apple doesn’t have to change their price again, which is, I presume, a fairly costly operation — but the equilibrium rate with an effective Brexit is lower than where it is now.
Once such situation is if the Parliament refuses to approve the referendum: Courts have rules their vote is needed, and most MPs were against Brexit beforehand.
That forecast was completely wrong, the opposite has happened.
As it's widely been reported in the UK, in both lefty and righty papers, I'm surprised you've failed to see it. It's been mentioned every time we get a positive growth figure, or an unemployment fall, or whatever.
The tragedy is that the British economy was going well through the beginning of 2016 and after a bumpy road immediately after the vote that momentum has held up over the last 6 months. That won't help us if we really do crash out of the EU hard.
No. It might be. I'll even accept will probably be. You haven't got a clue, I haven't got a clue. Professors of economics at respected universities don't agree, in house analysts at top financial institutions don't agree. At best you can say that heavily politically influenced bodies tend to agree.
I'm fine with you stating an opinion on this stuff, I have my own expectations (chunky period of inflation and stagnant growth at best) - but I'm awfully tired of people selling forecasts as facts
Then they were naive analyses rather than expert analyses weren't they?
Did anyone seriously think Cameron would stay on to implement Brexit? Only someone utterly clueless about British politics could have thought that - it was obvious there'd be a leadership change in the event of a leave vote.
It is also obvious that Article 50 was deliberately botched, the guy who wrote it have said so explicitly. 2 years is a stupid choice for the amount of time available, designed specifically to discourage people from trying to leave. So assuming it'd be invoked immediately anyway was a very bad assumption.
No matter how you slice it, the so-called "experts" were completely wrong and excuses don't cut it.
I'm writing a bot that shorts on Donald Trumps tweeting company names...