Apple said today it’s lowering the App Store commission for small, independent developers who are earning up to $1 million per year from thirty percent down to fifteen percent.
Arriving January 1, 2021, the new App Store Small Business Program aims to help indie developers during this period of global economic challenge. Apple is betting that the reduced App Store fee will leave more resources for developers to grow their businesses.
Any registered developers who are selling digital goods and services on the App Store are eligible to qualify for the 15 percent commission provided they earned no more than $1 million in proceeds (after Apple’s cut) during the previous calendar year.
- Existing developers who made up to $1 million in 2020 for all of their apps, and developers new to the store, can qualify for the program and the reduced commission.
- If a participating developer surpasses the $1 million threshold, the standard commission rate will apply for the remainder of the year.
- If a developer’s business falls below the $1 million threshold in a future calendar year, they can requalify for the 15 percent commission the year after.
To reiterate, the 30 percent fee remains in place if a developer’s apps have earned more than $1 million in proceeds during the previous calendar year.
Apple CEO Tim Cook was quoted as saying the following:
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.
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.
Apple is currently being investigated in the US, UK, France, Germany and several other countries regarding its App Store practices and fees. As mentioned, the Cupertino technology giant takes its usual thirty percent cut on all App Store sales, barring exceptions.
In the case of subscriptions, Apple cuts its fee in half to fifteen percent after a subscriber’s first full year. It’s suspected that companies like Amazon enjoy preferential treatment as they get special deals in terms of App Store fees that are not available to other developers.