Apple Reduces App Store Commission from 30 percent to 15 percent for most of the Developers

Apple Event

Apple on Wednesday announced a big change in its developer program. The company reduced the App Store commission rate to 15 percent from the standard 30 percent that it takes on paid apps and in-app purchases for most developers. This reduced cut is only for developers who are earning less than $1 million in annual sales per year from all their apps. This new initiative is called App Store Small Business Programme.

Apple claims that the new change will help Small Businesses and a “vast majority” of developers fall into this criteria. The new program will go live on January 1, 2021.

All the existing and new developers will be treated as per the new program. As soon as a developer surpasses the $1 million thresholds, he will be charged the 30 percent cut for the remainder of the year.

If a developer’s earnings drop in the future and falls below the threshold, he will re-qualify for the 15 percent App store cut the year after.

It is worth noting that the changes will not apply automatically to the eligible developers. Developers will have to enroll for the benefit. Apple will release more information about the program, eligibility requirements, and complete process in December. Apple has yet to explain why it isn’t automatically enrolling developers into the program

Apple has announced this big change when the company is facing outrage from the developer community. Companies including Basecamp, Epic Games, and Spotify have bashed the company for taking a high cut from in-app purchases.

App Store contributes a lot to Apple’s earning. According to a report by app analytics firm Sensor Tower, Apple’s App Store generated $32.8 billion globally in the first half of 2020 from paid apps, subscriptions, and in-app purchases. This is 24.7 percent higher than what Apple earned in 2019 during the same period.

The new change will surely affect Apple’s earning but will help new developers and small companies who earn through their apps and games.

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