Apple has announced a reduction to its App Store commission fees. The new App Store Small Business Program will allow any developer who earns less than $1 million in annual sales from all of their apps to qualify for a reduced App Store cut of 15 per cent.
The new fees cut Apple’s standard 30 per cent fee in half, on all paid app revenue and in-app purchases. Apple says the ‘vast majority’ of iOS app developers should be able to access the program. However, the company won’t say what percentage of its over 28 million registered app makers would qualify.
It also refused to specify how much revenue it would lose by the reduced commission. The App Store had generated an estimated $50 billion in revenue in 2019 according to CNBC.
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The new App Store Small Business Program is to come into effect on 1st January 2021 and the developers will be asked to apply for the program. Apple says it will release more information about the process, other eligibility requirements, and deadlines in December 2020. CEO Tim Cook says the program is a way of supporting small businesses.
“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,” Cook said.
It does look like the company is trying to get some developers on its side as its relationship with some hasn’t been particularly rosy. Apple has faced backlash over its percentage fees and the App Store fee reduction will decrease that.
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