App Store: Apple cuts commission rate for small developers

Apple said Wednesday that for tech developers with less than $1 million in annual net revenue on its site, it would slash its App Store commission rate to 15 percent.

Apple already earns a 30 percent fee from the App Store’s combined price of purchased applications and in-app purchases. The new proposal could slash the price they pay Apple in half for certain small app developers.
If it is named, the latest App Store Small Business Initiative would encourage any developer who receives less than $1 million in annual revenues on all their apps each year to apply for a discounted 15 percent App Store cut, half of the regular 30 percent charge from Apple, on all paid app revenue and in-app transactions.

“The cornerstone of economy and the beating heart of creativity and opportunity in societies around the world are small enterprises. We are launching this initiative to help small business owners write the next chapter on the App Store of innovation and growth, and to create the kind of premium applications that our consumers love,” said Tim Cook, Apple CEO, in a press release.

The company claims it should be possible for the “vast majority” of iOS software developers to join the service, but Apple refused to say what proportion of its more than 28 million registered app vendors would apply. Apple has refused to say how much of the decreased commission would impact its App Store sales.

Beginning January 1st, 2021, the new small business programme will take effect. Developers will be required to apply for the scheme, and Apple promises that in December it will release more information about the procedure and other conditions for approval and deadlines.