Apple caves on App Store rates

From the Financial Times’ “Apple to halve App Store rates for small businesses” ($) posted Wednesday:

The iPhone maker said it would charge app developers 15 per cent commission, instead of 30 per cent, if they earned less than $1m in 2020.

Developers whose earnings later exceed $1m will be charged at the standard commission rate for the remainder of the year, but could re-qualify in future years if their revenue dropped below the threshold again, the company said.

“Small businesses are the backbone of our global economy and the beating heart of innovation and opportunity in communities around the world,” said chief executive Tim Cook.

“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.”

But the move is unlikely to calm complaints from big developers, which are responsible for the majority of Apple’s App Store revenues.

My take: Pressure works. Apple had to give a little. Too soon to say if this is enough.

See Apple’s press release.

10 Comments

  1. Steven Noyes said:
    That is a big deal for a small 4-8 house shop. It would allow them to be a 5-10 house shop or simply make a bit more money with the same people.

    NOTE: This is not sarcasm.

    3
    November 18, 2020
  2. Jerry Doyle said:
    “…. But the move is unlikely to calm complaints from big developers, which are responsible for the majority of Apple’s App Store revenues.”

    No, I suspect the move does little to calm big developers complaints but the move I believe will be well received in the court of opinion.

    This nation is built on the mom & pops and small businesses that need inducements and sometimes need more favorable treatment to flourish. This is a welcomed policy by Apple to facilitate start-ups and the little guys & gals to become establish. I never witness much sympathy in the “court-of-opinion” for the big players who are well on their way reaching for ever more success. I believe Apple may have nip this whole issue in the bud!

    4
    November 18, 2020
  3. Joe Murphy said:
    @ Jerry D. “But the move is unlikely to calm complaints from big developers, which are responsible for the majority of Apple’s App Store revenues”

    I don’t see this as Apple giving in since they didn’t reduce fee’s for the big developers, those “responsible for the majority of Apple’s App Store revenues.” I see Apple’s move as putting their money where their mouth is when T.C. said ““Small businesses are the backbone of our global economy and the beating heart of innovation and opportunity in communities around the world,” said chief executive Tim Cook.“Small businesses are the backbone of our global economy and the beating heart of innovation and opportunity in communities around the world.” Walking their talk is a practice Apple is known for.

    2
    November 18, 2020
    • Jerry Doyle said:
      @Joe Murphy: Apple did not cave on this issue. In no way in my comment did I say Apple caved or inferred that Apple caved. My comment was Apple took away the highest level of argument that may have existed for the plaintiffs’ assailing Apple on this issue in the court of law and in the court-of-public opinion. In so doing, it is a stroke of brilliance by Apple that I am confident will ameliorate Apple’s standing on this issue before the courts and in the public arena.

      2
      November 18, 2020
  4. Joe Murphy said:
    @ Jerry D and Fred S.; Guys, we’re in agreement. I regret if I came across as saying Jerry commented Apple caved. That wasn’t on my radar.

    I “@ Jerry” acknowledging Jerry addressed “But the move is unlikely to calm complaints from big developers, which are responsible for the majority of Apple’s App Store revenues” prior to me. I apologize for not making myself clear.

    As I read this post, the only mention of caving is the headline and PED “My take: Pressure works. Apple had to give a little. Too soon to say if this is enough” which I responded to saying I don’t see Apple’s move as giving in to the big developers.

    If anything, I see Apple’s move as the opposite of appeasing the big developer’s complaining. I can see them thinking “apple makes most of their money off companies like mine – but they give the discount to those they don’t make as much on?” If anything, that’s the reverse of g”caving” and not how discounts are generally done today.

    0
    November 18, 2020
    • Jerry Doyle said:
      Thanks for the clarification Joe M. I never felt offended by your earlier comment. I thought you may have misunderstood mine and wanted to write another comment with more specificity to clarify from where I was coming. Jerry D

      2
      November 18, 2020
  5. Thomas Larkin said:
    I find it bizarre so much credence is given to the complaints of various developers of various sizes who are obviously in it to make money, whining about Apple making some money as well, given the essential role of its platform and store in providing not just apps to users but a platform and devices without which those apps are worthless. After all, developers aren’t giving their apps and games away for free. It is too easily forgotten that Apple should not have to forfeit the right to a reasonable return on its substantial and ongoing investment in providing a platform and store, once a certain threshold number of people are using it (continued).

    0
    November 18, 2020
  6. Thomas Larkin said:
    (Continued) Developers aren’t entitled to a free app store and platform (which Apple builds and maintains at considerable expense), and I suspect most of them readily see this and are happy to have a platform that is so trusted to run on and that provides so much value to them (including handling the money, as consignment and other storekeepers do). So, I agree with Apple’s stance on in-app purchases and am perplexed at the notion any developer has a “right” to skirt the conditions of having an app in the app store, or that Apple shouldn’t also be free to make unique deals with larger developers with whom there are larger considerations. I think too much ‘outrage’ is directed at difficulties navigating the app store submission process etc., and though not perfect Apple has proven adroit over time at adjusting things because it really does listen to and appreciate developers and is in fact banking on and supporting their ongoing success.

    1
    November 18, 2020

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