Apple announced today that it’s reducing its App Store commission to 15% for developers earning less than $1 million a year. The company has made this cut from the 30% commission is previously charged.
The new announcement comes as a part of Apple‘s “App Store Small Business Program” initiative. Under this project, only developers whose apps cumulatively earn less than $1 million per year can qualify.
If during a year, their apps cross the million-dollar mark, Apple will levy 30% rates till the year-end. If revenues fall below $1 million for a developer, they can apply for the program next year.
The company claimed that this initiative will benefit “the vast majority of developers,” without specifying a number.
The iPhone maker’s 30% commission has been a long-standing debate amongst companies and developers. Earlier this year, the company banned the popular game Fortnite for trying to circumvent Apple’s in-app purchase system. In response, Fornite’s owners, Epic Games, said that Apple holds an illegal monopoly for app distribution on iOS.
Companies like Spotify have complained about Apple’s “App Store Tax” multiple times. One of its arguments has been that Apple’s own services, such as Spotify rival Apple Music, get an unfair advantage on the company’s app distribution platform.
While the Cupertino-based tech giant says that it charges everyone 30% for in-app purchases, it has also cut some unusual deal such as Amazon Prime Video, where the ecommerce bigwig didn’t have to pay additional charges.
Apple boasted that in 2019, it facilitated $519 billion in commerce — 85% of that was from third-party apps. However, facilitated is the keyword here, so we don’t really know how much developers directly benefited from being on the App Store.
These new rules come into effect from January 1, 2021. You can read more about Apple’s announcement here.
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ChuckGSmith on November 20th, 2020 at 13:46 UTC »
Apple realises that like most long-tail platform strategies that it’s the top 10% of apps that generate 90+% of revenues. It looks like a good break for the little guy, makes the barrier to entry lower and they don’t really lose much. Their cash cows keep on giving.
zippydazoop on November 20th, 2020 at 13:42 UTC »
Damn, even corporations are employing progressive taxation.
311TruthMovement on November 20th, 2020 at 13:37 UTC »
I knew so many people from say 2007–2012 who thought their app was gonna be their full-time job, left the full-time gig to fully devote themselves to their only to take another normal job 6 months later. Presumably Apple are seeing a slowdown of these sorts of people, probably a lot of student apps submitted that aren't that great.
As much as these miserable rectangles have ruined and completely taken over my brain, I can't think of the last app that really amazed me. I could probably tell you that in 2009.