Apple Will Cut AppStore Charges to 15% for Some Developers, Starting January 1st
Apple will be reducing its AppStore developers commission by half as it launches a new AppStore Small Business Program. The company announced on Wednesday that the new developer program will help “small businesses and independent developers propel their businesses forward with the next generation of groundbreaking apps on the App Store.” The new program is expected to cover “vast majority of developers” who have their businesses running in the AppStore.
However, the program is not opened to all developers or companies operating on the AppStore, in fact you have to meet requirements to qualify for the Small Business Program, the most important being that you’re making less than $1 million per year. This means that developers making less than $1 million per year are eligible to enrol for the program, which means their commission charges will be cut down to 15% instead of the regular 30% taken by Apple. But then again it may vary based on the developer or the company’s earnings for that year.
Apple said the program will begin January 1st, 2021 which means developers who will qualify for the program are those that made up to $1 million or less in 2020, and also new developers are very free to enrol. And if by 2021, your earnings surpasses the $1 million threshold, you’ll be automatically placed on the 30% standard commission rate. Then again, if you fall below the threshold, during the course of the year, you’ll be eligible to the 15% commission rate the next year. Apple also talked about its 30% standard commission rate and that it remains “in place for apps selling digital goods and services and making more than $1 million in proceeds, defined as a developer’s post-commission earnings.” It also emphasised on an independent study by the Analysis Group that its commission structure is faultless and it’s in fact “the mainstream for app distribution and gaming platforms.”
“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 of creativity and prosperity on the App Store, and to build 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 none other, creating millions of new jobs and a pathway to entrepreneurship accessible to anyone with a great idea. Our new program carries that progress forward — helping developers fund their small businesses, take risks on new ideas, expand their teams, and continue to make apps that enrich people’s lives.”
Lastly, Apple noted that a more detailed explanation of its Small Business Program will be released in early December. This is not the first time the company has restructured its AppStore guidelines this year, in August it announced that it will be giving developers more room to express themselves if they feel something isn’t right on the platform, and in September, Apple adjusted its AppStore guidelines based to how streaming services operate on the platform. But prior to now, the last time the company reduced its commission rate was in 2016, when it started allowing services based on memberships keep 15% of the revenue if a member is still signed up on an iOS app for longer than 12 months, according to The Verge.