Apple Reduces Commission To Help Small Scale Developers

Apple has broken with convention when it introduced an initiative aimed toward small businesses. It recently announced that app publishers who have a total revenue below $1 million, are eligible for the “reduced” commission programme. Here, they are only required to pay Apple a 15% commission on the revenue that they receive from the app store.

Cupertino usually gets a 30% cut on all transactions that take place. Some developers have felt that the said profit margin is unreasonable, which includes the creators of Fortnite. This is why Apple is locked in a legal battle, which may give rise to sweeping changes and reforms across the board.

But with Apple’s new initiative for small businesses, the plan is to prop-up indie and less known app developers who are finding it increasingly tough to remain profitable. The reduced commissions will provide them with some breathing room, and help them weather the economic uncertainty caused by the pandemic.

“Small businesses are the backbone of our global economy and the beating heart of innovation and opportunity in communities around the world. We’re launching this program to help small business owners write the next chapter of creativity and prosperity on the App Store,” said Tim Cook, Apple’s CEO.

The details about the programme will be released in early December, but the gist of it is:

• Existing developers who made up to $1 million in 2020 for all of their apps, as well as developers new to the App Store, can qualify for the program and the reduced commission.
• If a participating developer surpasses the $1 million threshold, the standard commission rate will apply for the remainder of the year.
• If a developer’s business falls below the $1 million threshold in a future calendar year, they can requalify for the 15 percent commission the year after.