In what may be the biggest change in the App Store fee structure, Apple is reducing its App Store fee for some developers to 15%. The Cupertino-based company launched the App Store Small Business Program which subsidizes the App Store cut from 30% to 15% for developers who earned up to $ 1 million during the previous calendar year. Developers will become eligible after meeting certain criteria to take advantage of the reduced rate for both goods and in-app purchases made through the App Store.
The new App Store Small Business program will go into effect on January 1, 2021, meaning developers who have earned up to $ 1 million on a post-commission basis for this calendar year will be eligible to pay only half of the next year commission fee. If their proceeds exceed $ 1 million after Apple takes the 30% cut, they will not be eligible for the reduced fee in 2020. These developers will have to pay the regular 30% commission to Apple for next year as well.
But developers whose earnings exceeded $ 1 million this year after Apple’s cut, will see their revenue drop below $ 1 million in a future calendar year, become eligible for a fee cut Apple introduced. with the App Store Small Business Program. If they continue to earn less than $ 1 million thereafter, the commission will remain at 15%.
This will also affect the subscription fees paid by customers. If the developer pays fewer fees, they’ll charge less for the subscriptions customers purchase using the App Store. Normally, the price of some subscriptions is higher in the App Store than they are in the Google Play Store.
“Small businesses are the backbone of our global economy and the beating heart of innovation and opportunity in communities around the world. We are launching this program to help small business owners write the next chapter of creativity and prosperity on the App Store and to create the kind of quality apps our customers love, “said Tim Cook, Apple’s CEO.” The App Store has been an engine of economic growth like no other, creating millions of new jobs and a path to entrepreneurship accessible to anyone with a great idea. “
The change in the App Store fee policy is a welcome move for developers who have felt the stress of paying a 30% cut to Apple, resulting in lower revenue. Many companies recently criticized Apple’s App Store policy of cutting 30%, even calling it market abuse. One such company is Epic Games, which has gone so far as to sue Apple for its 30% cut policy. Apple launched Fortnite from the App Store after Epic Games refused to pay the 30% fee to Apple. Even today Fortnite is not available on the App Store, leaving iPhone tall, dry users.
Apple has cut the App Store fee in half for select developers who will earn up to $ 1 million.
- Apple has reduced the App Store fee to 15%.
- It charged all developers a 30% cut on all App Store purchases.
- But only select developers will be able to benefit from this new initiative.