Apple has announced a reduction to its 30% App Store commission under its Small Business Program. It is lowering the commission to 15% for developers who earned up to $1 million in proceeds during the previous calendar year. Apple says this program will benefit the vast majority of developers who sell digital goods and services on the store. It will provide them with a reduced commission on paid apps and in-app purchases. The App Store mall Business Program will launch on January 1, 2021.
The reduced commission translates to small developers and aspiring entrepreneurs having more resources to invest in and grow their businesses in the App Store ecosystem.
“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.”
Apple will reveal comprehensive details in early December. As of now, it has said that existing developers who made up to $1 million in 2020 for all of their apps, as well as developers new to the App Store, can qualify for the program and the reduced commission. Further, if a participating developer surpasses the $1 million threshold, the standard commission rate will apply for the remainder of the year. Plus, 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.
The reduced cut comes after the whole Apple-Epic Games fiasco where Fortnite was banned from the App Store in August. Then, Apple just terminated Epics Developer Account, to which Epic responded by taking it up the legal way. The Cupertino company has had spats with Facebook, Microsoft, WordPress and more who some or the other way accused Apple of forcing to add in-app purchases.