Apple highlights warm developer reaction to App Store Small Business Program
Apple is highlighting developers who are pleased with the recently-introduced App Store Small Business Program, one that stands to cut the standard 30% commission for App Store sales to 15% for many developers.
On November 18, Apple revealed the App Store Small Business Program, which will reduce the amount of money Apple takes from App Store transactions, including in-app purchases and subscriptions. Under the program, which will start from January 1, 2021, developers will only have to deal with a 15% transaction fee instead of 30, while their annual App Store income is below $1 million.
First-year subscription fees will also be 15% instead of 30% for qualifying developers under the program. Once the $1 million milestone is passed, the developer is charged the full 30% rate for the rest of the year.
"From focusing on their apps full time, to growing their teams, experimenting with features, and even launching new apps, developers are ready to write the next chapter of innovation and creativity on the App Store," writes Apple.
The list of developers covers a wide variety of apps, including Christian Selig, creator of Apollo for Reddit, who is quoted as saying "This made my morning. This will legitimately help so much. It'll make decisions like hiring on extra help, or acquiring better gear, going to conferences, doing more advertising, etc., much easier to justify, and it really means a lot to me that Apple is doing such an awesome thing! It's going to help my business a ton."
Marcus Gners, co-founder of Lifesum, said "This was a brilliant move and a great way of making it easier for developers in the most sensitive stage to survive. This, plus how the App Store makes it easier for developers to get off the ground, is great for small companies."
Despite developer appreciation for the cut, analysts have been quick to claim the initiative is a relatively cheap win for Apple. Morgan Stanley analyst Katy Huberty claimed the "vast majority" of App Store revenue is generated by the largest developers, so the program won't have much of an impact on Apple's bottom line.
JP Morgan analyst Samik Chatterjee proposed it was a "likely response to increasing security on 'Big Tech' business practices."
At the time of the launch, Apple CEO Tim Cook said the program was being put in place to "write the next chapter of creativity and prosperity on the App Store, and to build the kind of quality apps our customers love."