App Store Commission Reduced to 15% for Small Businesses

On November 18th, Apple announced that App Store commission will reduce by half, to 15% for small businesses with mid-year revenues of less than US$1 million in the App Store. The details of this program will be announced in December.

Apple stated that this App Store Small Business Program will begin on January 1, 2021. Developers who are eligible to participate in the program will have an reduced "App commission" of 15% on earnings from the paid apps and in-app purchases. Developers who meet any of the following criteria can apply for the program:

1. Existing developer’s total revenue from all applications in the App Store was less than US$1 million in the previous calendar year, the including revenue from paid applications and in-app purchases; specifically, the implementation of the program will begin on January 1, 2021. Developers had revenue in 2020 less than US$1 million can start to apply for the program. If the application is successful, a 15% commission will apply in 2021;

2. New developers who have not published any application on the App Store before can also apply after Apple announces the detail information. If they qualify for the conditions, a 15% commission will apply.

To be noted, this program needs to be applied by the developer and approved by Apple after review.

In addition, even after the application is approved, once the developer’s revenue in the App Store surpasses US$1 million, the 30% standard commission will still apply for the remainder  year; subsequently, if the developer’s revenue falls below US$1 million in the next calendar year, you can re-qualify for the 15% commission in the next year.

Apple CEO Tim Cook said in a statement: "Small businesses are the backbone of the 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."

App Store is one of most important businesses in Apple. According to public data, there are more than 28 million registered developers on the App Store. In Q3 of 2020, App Store has generated revenue of US$14.55 billion for Apple, accounting for 22% of Apple’s revenue in this period. In 2019, the App Store ecosystem facilitated global business transactions worth US$519 billion, of which over 85% of revenue came from third-party developers and enterprises of all sizes.