Great news from Apple: Decrease in App Store rates for small businesses

Apple will decrease the rates for small businesses to 15 percent commission starting this year.

 

Apple announced that it would charge app developers that earn less than $1 milion in 2020 a commission of 15 percent instead of 30 percent.

Developers whose earnings exceed $1 milion would be charged at the standard commission of 30 percent, with the possibility to requalify in future years if their revenue dropped below the $1m threshold.

 

“Small businesses are the backbone of our global economy and the beating heart of innovation and opportunity in communities around the world” said Apple’s CEO, Tim Cook.

“We’re launching this program to help small business owners write the next chapter of creativity and prosperity on the App Store and to build the kind of quality apps our customers love.”

 

Over the years, we’ve seen many companies trying to (legally) avoid Apple’s commission on their apps in many creative ways, for the sole purpose of them being too high, many times resulting in a worsened user experience. We believe that this change will definitely help start-ups and small businesses and increase the percentage of those who are willing to pay the commission - hence make use of the tools that Apple offers for smooth In-App Purchases, but not only.

This change does not come with any restrictions on the app developers, small businesses will still benefit from Apple’s developer tools.

 

Here are the key takeaways:

• Developers who made up to $1 million in 2020 for all of their apps can qualify for the program and the reduced commission.
• If a developer exceeds the $1 million threshold, the standard commission rate will apply for the rest of the year.
• If a developer made over the $1 million threshold in previous years, but their business falls below the threshold, they can re-qualify the year after for the 15 percent commission.

 

So far, the App Store has reached 1.5 billion devices worldwide, in 175 countries and over 40 languages. In 2019, the App Store ecosystem facilitated $519 billion in commerce worldwide.

 

We’re curious to see how this will affect the world of mobile apps in 2021! 📱 ✨