Apple Paul CEO Tim Cook speaks at the Apple Paul Worldwide Developer Conference (WWC) on Monday, June 4, 2018 at the San Jose Convention Center in San Jose, California.
Josh Adelson | AFP | Getty Images
Apple Pull will reduce its App Store commission rate for software developers with less than 1 1 million in annual net sales on its platform to 15%, the company announced Wednesday.
Apple currently charges a 30% commission on the total price of paid apps and in-app purchases from the App Store. For some small app developers, the new policy could halve the amount paid to Apple.
Apple Pal says the App Store small business program will begin Jan. 1 and eligible developers will reduce the app store fee for paid in-app and in-app purchases. New developers who have not previously published on the App Store will also be eligible for a lower, 15% commission fee.
The move is an olive branch of Apple as legislators around the world are focusing more on its business practices for the App Store, the only way for most people to install software on an iPhone or iPad. A report by the House Judiciary Subcommittee on Antitrust, published in October, states that Apple generates “supra-normal profits” from the App Store.
The new program is for small developers who earn less than million 1 million per year on all of their apps, after an all-in-one fee on Apple’s App Store. Once the developer passes that threshold, they will be billed at a standard 30% rate, Apple said. If they later fall under the calendar calendar year sales of 1 million, the lower commission can be reinstated. Apple Play said it would release more details about the reduced commission terms next month.
Wednesday’s announcement differs from Apple’s low 15% fee in the second year of the second subscription submitted by the Store, which also applies to large companies and was implemented in 2016.
Apple Play said in its annual filing with the SEC last month that lowering its App Store commission rate could hurt the company’s financial results. App Store revenue is a large part of Apple’s services business, which generated આવક 14.55 billion in revenue for the quarter ended September, accounting for 22% of the company’s revenue during the period.
But Apple Pal will still charge a 30% fee for in-app purchases for top-earning apps, meaning Apple Pal’s impact on financial impact may be minimal. In addition, a maximum discount is offered for each publisher, as the commission on the sale goes back to 30% after Apple Pal’s fee exceeds $ 1 million.
Apple Pal says there are about 1.8 million apps on the Store, but apps are a winner-take-all business. App analytics firm Censor Tower estimates that the top 1% of app publishers generate 93% of revenue on the App Store and 93% on Google’s Play Store.
The change will help small companies offer virtual classes or sessions through the app, which have fixed costs such as instructor time and have increased in importance during the Covid-19 epidemic. Website Play, in a separate post on its website, released the Swimming Coach app, coding app for kids and an indie game as businesses that could benefit from the policy change.
Apple does not charge a commission on physical goods purchased through apps such as Pal, Personal Class or Uber Book. But it treats other classes or events held online like a virtual yoga session as digital goods and is subject to commission fees. It postponed the fee until the end of the year after a heated public dispute with Facebook.
Facebook or Fortnite maker Epic Games, which is fighting a legal battle over 30% of the company’s fees and related practices, is unlikely to change. An estimate from August Gust suggests that Epic Games has grossed ૨ 1.6 billion on the App Store to date, making it unfit for reduced commissions.
.
