Apple will now distribute more money to developers earning less than $1 million, reduces its fee to 15 per cent

In what could be the biggest change in the App Store’s fee structure, Apple is cutting the App Store fee down to 15 percent for some developers. The Cupertino-based company has launched the App Store Small Business Program that subsidizes the App Store from 30 percent to 15 percent for developers who made up to $ 1 million in revenue in the previous calendar year. The developers are eligible after meeting certain criteria to take advantage of the reduced fee for both merchandise and in-app purchases through the App Store.

The newly launched App Store Small Business program will take effect on January 1, 2021, meaning the developers who have made up to $ 1 million on a post-commission basis this calendar year will be eligible to pay just half of the commission next year. compensation. If their revenue crosses the $ 1 million mark after Apple enacts the 30 percent cut, 2020 will not qualify for the reduced commission. These developers will also have to pay the regular 30 percent commission to Apple in the coming year.

But developers whose revenues this year exceed $ 1 million following Apple’s cut, who see their revenues drop below $ 1 million in a future calendar year, are eligible for the commission cut Apple introduced under the App Store Small Business Program. After that, if they continue to make less than $ 1 million, the commission remains 15 percent.

This also affects the subscription costs that customers pay. If the developer pays less commission, they will charge less for the subscriptions customers purchase through the App Store. Normally, the price of some subscriptions is higher in the App Store than 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’re launching this program to help small business owners write the next chapter on creativity and prosperity in the App Store, and build the kind of quality apps our customers love, ”said Tim Cook, Apple’s CEO. “The App Store has been a driver of economic growth like no other, creating millions of new jobs and creating a path to entrepreneurship that is accessible to anyone with a great idea.”

The change to the App Store reimbursement policy is a welcome step for developers who have felt the stress of paying Apple a 30 percent discount, resulting in less revenue. Many companies recently disapproved of Apple’s 30 percent App Store policy, even calling it market abuse. One of these companies is Epic Games, which even Apple complained about its 30 percent discount policy. Apple had started Fortnite from the App Store after Epic Games refused to pay the 30 percent commission to Apple. Even today, Fortnite is not available on the App Store and is leaving iPhone users high and dry.

Apple has cut the App Store commission in half for select developers who will earn up to $ 1 million.

News Highlights:

  • Apple has lowered the App Store commission to 15 percent.
  • It has charged all developers a 30 percent discount on all App Store purchases.
  • But only selected developers can take advantage of this new initiative.
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