Apple said on Wednesday that it will reduce the commission rate in the App Store to 15 percent for software developers whose annual net sales on its platform do not exceed $ 1 million.
Apple currently collects a commission of 30 percent of the total price for paid apps, and in-app purchases made through the app store. For some small app makers, the new policy could cut the amount they pay Apple in half.
Apple says: The App Store Small Business Program will start on January 1, and that eligible developers will receive a reduced commission for the App Store in exchange for paid app purchases and in-app purchases. New developers who have not previously published an app on the App Store will be automatically eligible for the new commission rate.
It is believed that Apple is seeking through this step to show goodwill to lawmakers around the world who are becoming increasingly focused in its commercial practice of the App Store, which is the only way for most people to install software on smartphones and iPads. A report issued by the House of Representatives’ Judicial Subcommittee on Antitrust, published last October, says that Apple is making “more than normal profit” from the app store.
The company explained that the new program is intended for small developers who earn less than a million dollars annually through all of their applications in the Apple App Store after deducting Apple’s fees. Once developers cross this limit, the company said, they will take a standard commission rate of 30 percent. And if their sales subsequently fall below $ 1 million in a calendar year, they can revert to the lower commission. And Apple said: It will reveal more details about the terms of the reduced commission during the next month.
Last month, the company said in an annual report to the Securities and Exchange Commission that lowering the app store commission rate could harm the company’s financial results. The app store revenue is a major part of Apple’s services business, which generated $ 14.55 billion in the quarter ended last September, representing 22 percent of the company’s revenue for that period.
But Apple will still charge a 30 percent fee on in-app purchases for the more profitable apps, which means that the impact on Apple’s financials may be minimal.
Apple says: The (App Store) store offers about 1.8 million applications. Large publishers whose percentage does not exceed 1 percent of the total number of publishers generate about 93 percent of revenues through the App Store from Apple and (Play Store) from Google, according to a report by the app analytics company (Sensor Tower) for the year 2019.