Apple drops App Store fee to 15% for businesses making under $1m
- Apple has dropped its App Store developer fees from 30% to 15%
- The change only applies to businesses making under $1 million
- The new fees apply to app sales, subscriptions and purchases
- After surpassing $1 million, Apple’s cut will go up to 30%
Apple announced today that they will be launching a new App Store Small Business Program that will see developers App Store fees dropped for businesses that make less than $1 million. The new 15% commission rate applies to paid app purchases, in-app purchases and subscription fees. The new fee structure benefits most developers on the App Store, except large businesses.
From Apple:
"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, and to build the kind of quality apps our customers love," said Tim Cook, Apple's CEO. "The App Store has been an engine of economic growth like none other, creating millions of new jobs and a pathway to entrepreneurship accessible to anyone with a great idea. Our new program carries that progress forward -- helping developers fund their small businesses, take risks on new ideas, expand their teams, and continue to make apps that enrich people's lives."
New and existing developers can take advantage of the new fee structure. Going forward, developers who earn up to $1 million in the prior calendar year will be able to participate.
Developers who earn over $1 million in app sales, subscriptions and purchases will not be eligible for the new program - with the $1 million total calculated using post commission earnings (that take into account total earnings after Apple's standard 30 percent cut). If you’re a developer that has made over $1 million, you will continue to pay the standard 30 percent commission rate.
Apple has said that the reduced App Store fees are being implemented to help small business owners maintain their businesses - and to accelerate innovation during uncertain times. The fee changes will be a relief to many developers who have been unhappy with Apple's App Store fees. Apple has faced scrutiny from U.S. antitrust regulators in the United States, and investigations conducted by those regulators have surfaced complaints from developers who believe Apple's fees are too high.
Apple says they have more than 28 million developers from 227 regions who offer apps through the App Store, with 1.8 million apps available worldwide. Apple expects the App Store Small Business Program to generate more digital commerce, support new jobs, and provide more funds for small businesses to invest back into their apps as they work to create innovative software for Apple users.
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