Apple announced its new App Store Small Business Programme today, which is aimed to help small businesses and indie developers grow on its platform. The programme introduces a new structure to Apple’s App Store commission system—the commission rate for businesses and developers who are eligible for this programme will be halved.
Apple charges third-party developers a commission for the transactions made on its app store for buying paid apps, and as well as the in-app purchases. The current standard commission rate for developers is 30%. With the introduction of the new Small Business Programme, all developers and businesses earning up to $1 million for the calendar year will be considered eligible and will only have to pay the half of the standard commission rate, that is, 15%.
There are no other changes that come with the new programme, which means that the businesses and developers who are part of the programme will still receive the same treatment from the company as those who are not part of the programme. In other words, the developers will get access to everything which those who are part of the regular Apple developer programme do; such as access to Xcode, Swift, Apple’s payment interface, countless APIs, and so on and so forth.
The new Small Business Programme is set to start from 1st of January, 2021. The businesses’ or the developers’ eligibility will be determined based on their gross revenue of 2020, which is the total revenue they have earned across all their apps.
The eligibility will also be determined based on post-commission basis, meaning that the commission will be deducted first and only the remaining revenue will be compared against the $1 million threshold. This simply means that those who have earned more than the $1 million mark will still be eligible for the programme if their post-commission revenue is still lower than $1 million.
This new programme comes during the upheaval caused by the COVID-19 pandemic, which has led to mass lay-offs and reduction in job opportunities. The significant reduction in the Apple Store’s commission rate will help small businesses and independent developers grow and sustain themselves during these uncertain times.
“The savings mean small businesses and developers will have even more funds to invest in their businesses, expand their workforce, and develop new, innovative features for app users around the world,” Apple wrote, in the press release.
Apple, in the past, has been criticized for charging its developers with a high commission rate, but they have defended this saying that it is justified as the rate of commission is similar across other markets of the same level. However, Google has not been as stringent about imposing commision, which has led to a widespread rebuke of Apple’s App Store policies. Thus, while today’s move is being branded as a way to help small businesses survive the impact of COVID 19, it will also work towards clearing some of the heat the company has recently been receiving from not just lawmakers but the industry as well.
The Apple App Store currently has about 1.8 million apps, and majority of them are developed by small businesses and independent developers.
