Apple has confirmed plans to cut the commission it makes from small developers on the App Store following months of controversy surrounding its practices.
The new App Store Small Business Program will lower the commission Apple takes from 30% to 15% effective January 1, and is applicable to all small businesses earning less than $1 million in proceeds a year.
The company has confirmed that developers that earn less than $1 million in a calendar year will be able to take part in the new program, and it’s based on a post-commission figure, so developers will only pay the 30% commission if they earn more than $1 million after Apple has taken its cut.
It’s a generous offer and should go a long way in appeasing the critics.
Developers who currently earn more than $1 million in revenue from the App Store but subsequently drop to less than the $1 million thresholds will be able to requalify the following year, though it’s important to note that this scheme works on an annual rolling basis, with developers effectively “locked-in” to the 15% or 30% commission for the following year.
Speaking of the new scheme, Apple’s CEO Tim Cook said: “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.
“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.”
Are you pleased to hear that Apple is supporting small businesses and cutting its 30% commission rate? Let us know and check back soon for more Apple news and insights.