Apple has made a major announcement regarding its future App Store revenue share with developers going forward, a topic of major contention in recent months. Apple says that starting in 2021, it plans to offer developers earning less than $1 million in revenue a higher cut as part of a new Small Business Program. Instead of Apple’s 30% cut, these developers will instead see Apple taking just 15%. The new revenue-sharing model is certain to have a dramatic impact on smaller developers who rely on revenue via the App Store.
To repeat, the new 15% cut from Apple will only apply to developers that earn less than $1 million annually via in-app purchases and premium app offerings. According to Apple, this grouping includes the “vast majority” of iOS developers. Developers will have to apply to the program, apparently not being automatically enrolled. Developer proceeds for 2020 will be used to decide if they meet the program’s requirements. Developers exceeding $1 million in revenue will be removed, and will then have to have a full calendar year below $1 million before reapplying.
Apple CEO Tim Cook provided a prepared statement to coincide with Wednesday’s Small Business Program announcement. Cook describes small businesses as “the backbone of our global economy and the beating heart of innovation.” He goes on to say that the program is designed to help these small businesses “write the next chapter of creativity and prosperity on the App Store.”
A 15% revenue cut isn’t new to the Apple platform, though prior to now it has been incomparably exclusive. Apple’s previously confirmed certain closed-door deals with app-makers to halve Apple’s fees. For example, Amazon Prime Video receives the generous 15% cut from Apple. It’s expected that other high-demand services have similar deals, but are kept private. It’s known that Epic Games previously pursued such a deal, prior to filing their ongoing lawsuit against Apple.
As for how truly impactful Apple’s Small Business Program will be, analysts at Sensor Tower expect a meaningful but not hugely hit to Apple’s overall revenue. Sensor Tower says that these small businesses provided around 5% of Apple’s overall revenue this past fiscal year. That’s despite these small businesses making up as much as 98% of the overall developer makeup on the App Store. Losing as much as half of that 5% is still significant, but clearly Apple’s major revenue comes from bigger apps that will still have the 30% cut.
The decision certainly isn’t going to impact Apple’s ongoing lawsuit with Epic Games. Epic boss Tim Sweeney has already made a public statement, saying the program “divides app creators & preserves Apple’s monopoly.” Fortnite certainly makes much more than just $1 million in revenue on the App Store. It’s even possible that Epic’s lawsuit helped push Apple to create the Small Business Program. Apple‘s revenue share is likely to remain a focus for some time yet.
Source: NYT
![\"IT電腦補習](\"http://itteacheritfreelance.hk/test/wordpress/wp-content/uploads/2016/05/logo2-2.png\"){kind=logo}
www.itsec.hk
www.itsec.vip
www.itseceu.uk
Leave a Reply