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Apple to narrow down the fee charged from small app store developers

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Apple slashes the fee charged from the developers
Apple slashes the fee charged from the developers ,Photo by Medhat Dawoud on Unsplash

The multinational technology company Apple is planning to decrease the fees charged to small software and service sellers on the App store. This action comes as one of the massive changes in its pricing since the revenue structure of 2008.

Accordingly, the fees’ narrowing is part of the App Store Small Business Program, which will go live from January onwards.

Reasons for Fee Changes

In early 2020, Apple faced high criticism and negative PR due to its fee-charging policies. Specifically, in July 2020, Tim Cook, the CEO of Apple Inc., appeared before US lawmakers due to Apple store’s high rates.

Next, the European Commission also opened its probe into Apple’s dominant market practices and started anti-trust scrutiny in October 2020.

Following these allegations, the fee cut’s ideation diminishes the financial struggles inflicted by the pandemic on the software developers.

In a statement, Apple’s officials mentioned that this move would carve a new chapter of prosperity on the App Store and build quality apps for the customers.

Insights into the new fee rule

Currently, Apple charges a high commission rate for selling virtual goods and services from the developers using its store. On November 19, 2020, it announced that the App store fee, which stood at 30% for software developers, is now slashed to 15%.

To qualify for the fee cut, the developers’ threshold earning is set at $1 million. Market researchers mention that about 4.9% of the App Store’s total revenue comes from the developers earning less than $1 million.

Apple said that this change would nurture the finances and investments of its over 28 million developers. Since a humongous amount of developers are small in scale, this program will cover the vast majority of apps on the Apple store.

This is a laudatory move by Apple to lend a helping hand to its developers and respond to the abuses hurled at the app market. Analysts also regard this as a strategy to shut down the complaints by the small-scale developers.

App developers of coding apps like Hopscotch and virtual fitness apps like MySwimPro have given positive responses to this news.

An avid learner having infatuation for numbers and finance. Also, an individual with unfiltered opinions who likes to mix the metrics of both professionalism and creativity.

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