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Apple will halve App Store platform fees for smaller developers in 2021

Apple will halve App Store platform fees for smaller developers in 2021

November 18, 2020 | By Chris Kerr

Apple is halving its iOS platform fees to 15 percent from 30 percent for smaller developers through a new initiative called the App Store Small Business Program

As of January 1, 2021, developers who earned under $1 million in revenue during the last fiscal year will qualify for the reduced rates, allowing them to earn more from paid apps and in-app purchases. 

Apple claims the "vast majority" will benefit from the reduced fees, and that the initiative will "accelerate innovation and help small businesses and developers propel their businesses forward."

"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 Apple chief exec, Tim Cook. 

"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."

Offering a brief explanation as to how the program will work, Apple said developers who made up to $1 million in 2020 for all of their apps can qualify for the reduced commissions. 

Assuming a participating developer surpasses that $1 million threshold in the future, the standard 30 percent commission rate will apply for the remainder of the year. If, however, a developer's business once again falls below the $1 million threshold further down the line, they'll be able to re-qualify for the 15 percent rates the following year. 

Apple says it will share a more comprehensive explainer in December, but indicated it has launched the initiative to build more trust with developers who perhaps feel burned by the flat 30 percent rates. 

"Earning the trust of users and developers has been an important goal of the App Store from the beginning," wrote the company. "The new App Store Small Business Program will build on that progress to generate even more digital commerce and app innovations, support new jobs, and help small and independent developers continue to bring great software to Apple users."

The move also comes as Apple continues to do battle with Fortnite maker Epic Games over its attempt to circumvent App Store fees. The two companies have been locked in a long-running legal dispute that began when Apple pulled Fortnite from the App Store after Epic updated the popular title with an unauthorized payment method that would've cut Apple out of the loop. 

Although a Judge has found that Apple was well within its rights to remove Fortnite over the guideline breach, Epic argues that Apple is a running a monopoly by refusing to let developers bypass the usual platform fees. The case will head to trial in May 2021.

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