After all the controversies around the 30 per cent App Store commission rate going on for months, Apple has officially announced to reduce the rate to 15 per cent for small businesses. Starting January 1, 2021 app developers who earn up to $1 million, roughly around Rs 7.41 crores, in annual sales per year from all their apps will be eligible for the reduced 15 per cent commission rate. Apple call this programme App Store Small Business Programme.
Apple right now takes a 30 per cent commission rate from all app developers for which it faced major backlash from companies like Spotify and others over the past few months. Commenting on the initiative, Apple said that the move will benefit a “vast majority” of developers. The company is yet to reveal the number of developers coming under the eligibility criteria of the new programme.
At the time of announcing the App Store Small Business Programme Apple said that it will be available for existing developers who made up to $1 million in 2020 for all their apps and also new developers on the App Store.
The company highlighted that if a participating developer surpasses the $1 million mark the standard 30 per cent commission rate will apply for the remainder of the year. While if a developer’s business drops below the 15 per cent threshold in a future calendar year they could re-qualify for the 15 per cent commission rate the year after.
Commenting on the reduced commission rate Apple CEO Tim Cook said, “The App Store has been an engine of economic growth like none other, creating millions of new jobs and a pathway to entrepreneurship accessible to anyone with a great idea.” Cook further said, “Our new programme carries that progress forward — helping developers fund their small businesses, take risks on new ideas, expand their teams, and continue to make apps that enrich people’s lives.”
Developers planning to join the programme will be required to enroll for the benefit as Apple will not apply the new rate automatically for the eligible developers. More details about the programme will be revealed in early December, the company informed.