Apple cuts App Store fees by half to 15%, big win for developers under Small Business Program

Apple has announced that it will reduce its App Store commission rate for most developers starting next year. The iPhone-maker has launched a new program called App Store Small Business Program under which iOS developers who earn less than a million dollars in annual sales will be eligible for a reduced 15 percent commission.

Currently, Apple takes a 30 percent cut from all the paid app revenue and in-app purchases of apps downloaded from the App Store. Here is everything you need to know about the new Apple developer program which goes live next year.

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Apple’s new App Store Small Business Program kicks off on January 1, 2021. iOS developers who wish to participate will need to apply for the program. The list of requirements and the information regarding the process will be released by Apple in December 2020.

While the comprehensive details will be released in early December, the essentials of the program’s participation criteria are easy and streamlined:

• 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 re-qualify for the 15 percent commission the year after.

Apple said it will continue charging a 30 percent commission rate for apps selling digital goods and services and making more than $1 million in proceeds.

The company has had a rough year with regulators and antitrust investigations into the App Store. The likes of Epic Games took Apple to the court over issues related to in-app purchase options in Fortnite.

Regardless, the App Store has been providing Apple and developers a significant chunk of revenue. In 2019 alone, the App Store ecosystem facilitated $519 billion in commerce worldwide — with over 85 percent of that total accruing solely to third-party developers and businesses of all sizes.