Apple Drops App Store Fees to 15% for All Developers Making Under $1 Million From App Store

Apple today announced the launch of a new App Store Small Business Program that will see the Cupertino company lowering its App Store fees for small business owners and independent developers. Starting on January 1, 2021, all developers who earn less than $1 million from the ‌App Store‌ will pay 15 percent in commission to Apple, down from the standard 30 percent.

app store 15 percent feature
The 15 percent commission rate applies to paid app purchases, in-app purchases, and subscription fees, with the lowered rate benefitting most developers on the ‌App Store‌.

"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."

All developers who earned under $1 million in 2020 are able to qualify for the program and the reduced 15 percent commission rate. New developers who join the ‌App Store‌ and create apps in 2021 will also qualify. 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 will not be eligible, with the $1 million total calculated using post commission earnings that take into account total earnings after Apple's standard 30 percent cut. Developers earning more than the cutoff will continue to pay the standard 30 percent commission rate.

If a developer who participates exceeds $1 million in earnings, commissions will go back up to the 30 percent rate as well. For example, a developer who joins the program in 2021 and exceeds $1 million in earnings mid-year will need to pay out 30 percent commission going forward for the rest of the year. This will also apply in 2022, but if after that revenue falls below the $1 million threshold, the developer will be eligible for the program again in 2023.

As for subscriptions, developers who are eligible for the program will pay a 15 percent commission on subscriptions, even during the first year. Apple already has mixed ‌App Store‌ fees for subscriptions. During the first year a person subscribes, the standard commission rate is 30 percent, but it drops to 15 percent after that. That fee structure remains in place, but Small Business Program participants will pay 15 percent for all subscribers.

According to Apple, the reduced ‌App Store‌ fees are being implemented to help small business owners maintain their businesses and accelerate innovation during uncertain times. The fee drop is being implemented as developers try to work through economic challenges and more and more business are pivoting to digital as people continue to work and learn from home.

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.

Today's fee cut won't benefit some of the developers that have been the most vocal about Apple's commission rates, such as Epic Games, but it will relieve some of the pressure on the small business owners that need the most help.

There are more than 28 million developers from 227 regions who offer apps through the ‌App Store‌, and 1.8 million apps available worldwide. Apple says that the program will be available to the majority of developers, with those developers all receiving the same access to Apple's developer tools and programs. 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.

Top Rated Comments

Coconut Bean Avatar
43 months ago
EPIC!!!!

Or well, not for EPIC. LoL.
Score: 110 Votes (Like | Disagree)
Davehaslanded Avatar
43 months ago
Now let’s see if Epic drop their legal battle, considering they claim they were only doing it for the ‘little people’, and not themselves. I doubt it.
Score: 89 Votes (Like | Disagree)
PickUrPoison Avatar
43 months ago
This is huge, and is targeted at exactly the size of devs that can use it most.
Score: 65 Votes (Like | Disagree)
Macropanda Avatar
43 months ago
This is great. I’m a dev that doesn’t earn even close to that limit so very nice indeed.
Imagine getting near the end of the year and sitting at 990k income. Surely it would be better to pull the app and lose a bit to get the next year at 15%?
Wouldn’t it make sense to make the first 1m 15% and 30% for everything earned over 1m?
Score: 49 Votes (Like | Disagree)
berrymetal Avatar
43 months ago
That is freaking amazing!
Score: 48 Votes (Like | Disagree)
LeeW Avatar
43 months ago
Let's be honest here, Apple is positioning this to fend off the various actions and criticism against them, doing it in a way that it will cost them less. But, having said that, it's a big deal for the smaller developer, so it's a win. But they are not doing it by choice, its a forced action.
Score: 46 Votes (Like | Disagree)

Popular Stories

iOS 17

iOS 17.4 Will Add These New Features to Your iPhone

Monday February 19, 2024 6:52 am PST by
Apple last month confirmed that iOS 17.4 will be released in March, and the update includes several new features and changes for the iPhone. Key new features in iOS 17.4 include major App Store changes in the EU and Apple Podcasts transcripts. The update also adds new emoji and includes preparations for the launch of next-generation CarPlay later this year. More details about the new...
General Apps Messages

Apple Announces 'Groundbreaking' New Security Protocol for iMessage

Wednesday February 21, 2024 6:00 am PST by
Apple today announced a new post-quantum cryptographic protocol for iMessage called PQ3. Apple says this "groundbreaking" and "state-of-the-art" protocol provides "extensive defenses against even highly sophisticated quantum attacks." Apple believes the PQ3 protocol's protections "surpass those in all other widely deployed messaging apps," according to its blog post:Today we are announcing...
samsung galaxy ring

'Apple Ring' Allegedly in Development to Rival Samsung Galaxy Ring

Tuesday February 20, 2024 2:27 am PST by
Apple is speeding up development of a smart ring that can be worn on the finger to track users' health biometrics, claims a new report coming out of Korea. Teaser image of Samsung Galaxy Ring shown at Galaxy Unpacked in January Apple has toyed with the idea of a ring wearable for several years, as indicated by several patents, but with Samsung preparing to bring its own product to market, the ...
volvo s60 drivers apple maps

iOS 17.4 Beta Adds CarPlay Option to Show Upcoming Maneuvers in Instrument Cluster

Tuesday February 20, 2024 10:47 am PST by
The fourth beta of iOS 17.4 that Apple released today adds a new CarPlay feature, according to the notes that Apple provided to developers. In supported CarPlay vehicles, there's now an Apple Maps option to show information about upcoming maneuvers in the instrument cluster. CarPlay users will be able to swap the display type between the main and instrument cluster by tapping on the map...
m3 macbook pro 14 16

Apple Now Selling Refurbished M3 Pro and M3 Max MacBook Pro Models

Monday February 19, 2024 5:04 pm PST by
Apple today began offering refurbished versions of the 14-inch and 16-inch MacBook Pro models with M3 Pro and M3 Max chip options, offering the machines at a discount for the first time since their October 2023 release. The release of M3 Pro and M3 Max models on Apple's refurbished store comes almost two weeks after the entry-level 14-inch M3 MacBook Pro first appeared on the store....
iPad Pro OLED Feature 2

Apple's Upcoming OLED iPad Pro Models Rumored to Be Much Thinner

Tuesday February 20, 2024 1:39 pm PST by
Apple is planning to update the iPad Air and iPad Pro lineups as soon as March, and the new iPad Pro models will be significantly thinner according to dimensions shared by 9to5Mac. Citing sources with knowledge of Apple's plans, the site claims that the larger version will be more than 1mm thinner. The current 12.9-inch iPad Pro measures in at 6.4mm thick, but the new model is said to be 5mm ...
apple wallet drivers license feature

Apple Said iPhone Driver's Licenses Will Expand to These 8 U.S. States

Monday February 12, 2024 7:51 am PST by
In 2021, Apple introduced a feature that lets residents of participating U.S. states add their driver's license or ID to the Wallet app on the iPhone and Apple Watch, providing a convenient and contactless way to display proof of identity or age. Unfortunately, states have been slow to adopt the feature since it was first announced in September 2021, with IDs in the Wallet app only available ...