As part of a new program for small businesses, Apple on Wednesday announced a reduction in its long-term App Store commission rate, one of the most significant changes in how iOS developers make money in the iPhone manufacturer’s digital app market history. The new App Store Small Business Program, as it is called, allows any developer who earns less than $ 1 million a year in annual sales from all of their apps to qualify for a 15 percent discount on the App Store, Apple’s standard 30 percent half fee, on all paid app revenue and in-app On purchases.
The company claims that the “majority” of iOS app developers should be able to access the program, but Apple declined to say what percentage of its more than 28 million registered app makers qualify. Apple also declined to say how much the app store revenue will be affected by the reduced commission. But the App Store, which has a revenue of 50 billion in 2019 According to CNBC, One of Apple Most crucial businesses beyond the iPhone And indicates The pillar of digital services strategy CEO Tim Cook stated that the future of the company’s business.
The new small business program will take effect on January 1, 2021. Developers will be asked to apply for the program, and Apple says it will release more information in December about that process and other eligibility requirements and deadlines. Apple did not elaborate on why developers chose not to enroll in the program automatically, but the fact that developers are required to register may reduce the likelihood of fraud or other abuse.
Apple today explained some of the rules of the program. The company said it will look at developer revenue for the year 2020 to determine eligibility starting January. New developers may also qualify immediately. For app developers who exceed the 1 million limit at any time by 2021, they will be automatically removed from the program and subject to the standard 30 percent deduction. If the developer falls below the $ 1 million limit in a future calendar year, Apple says they can re-qualify for the program and its reduced commission rate.
Apple CEO Tim Cook described the move as a way to support small businesses, calling it “the backbone of the global economy and the heartbeat of innovation” in a statement:
Small businesses are the backbone of our global economy and beating the heart of innovation and opportunity in societies around the world. We are launching this program to write the next chapter of creativity and prosperity for small business owners in the App Store and to create quality apps that our customers will love. The App Store is an engine for economic growth like no other, a way to entrepreneurship that is available to anyone with millions of new jobs and great ideas. Our new program will drive that progress – funding developers for their small businesses, taking risks on new ideas, expanding their teams and creating applications that enrich people’s lives.
This is not the first time Apple has slashed commission rates for some developers. The company’s most recent change occurred in late 2016, which began allowing subscribers to keep subscription services at 15 percent extra revenue if they signed up through the iOS app for more than 12 months.
Apple has reduced its app store or completely excluded some services Sign up for Amazon Prime Video And for more recently Major video rentals and purchases in the app, But the company often cuts such deals only behind closed doors and generally does not extend those benefits to developers, it does not negotiate directly.
This new program is sure to please more niche app makers, indie game developers and other members of the iOS ecosystem who feel that the level and success of the application complex has not translated into obvious developer interests in recent years. Apple has faced a tough year of bad press, most of which focused on reducing Apple’s all paid app sales and in-app purchases by 30 percent and imposing a number of rules on developers before entering the App Store.
The dispute string contains the beginning of a European Antitrust Investigation on App Store and Apple Pay; a Public showdown with software maker Basecamp On the developer’s Hay Email client; A Unprecedented legal battle with Epic Games By including Epic’s own app payment options Fortnight; And Spots range Facebook, Microsoft, And others are considered unfair restrictions on Apple’s rivals and competitors third-party iOS apps.
There are also very small dust-ups – like when WordPress alleges that Apple forced it to add purchases to the app – and they usually revolve around Apple’s many rules around the App Store model and other financial aspects of payment options, commissions and app distribution.
Includes scores of big-name app manufacturers and well-known companies, from Tinder parent company Match Group to Spotify Have rallied in recent months to criticize Apple In order to have a monopoly control over the iOS market and to exploit its enormous power to undermine competition and collect unreasonable fees from large and small developers.
The App Store is a small business program that, while kept as a means of relieving app makers during the ongoing recession caused by the COVID-19 pandemic, cannot be divorced from these controversies that Apple has found in many past cases. Year. The company says To the edge There was no reason to decide to start the program now, and refused to say whether the program was in operation before the outbreak began.
It is clear that Apple’s relationship with developers is much more shaky now than in previous years, and this new commission reduction will greatly help in repair.