Apple To Reduce App Store Fees For Small Businesses With Under $1 Million in Revenues (techcrunch.com) 49
Amid increased regulatory scrutiny over how it runs its App Store, Apple today announced it will reduce the App Store commissions for smaller businesses. Under the new guidelines of the "App Store Small Business Program," as it's called, developers earning up to $1 million per year will only have to pay a 15% commission on in-app purchases, rather than the standard 30% commission. From a report: The new program will launch on Jan. 1, 2021, and will be based on the business's revenues in the previous calendar year -- meaning 2020. This $1 million threshold will be based on how much existing developers made across all their applications on a post-commission basis, Apple notes. That means the businesses could actually earn up to $1.3 million in gross revenues. The reduced fee will also apply to new developers launching their apps for the first time. If, during the course of the year, the developer's apps surpass the $1 million threshold, they'll be moved to the standard commission rate, generally 30%, for the remainder of the year. They'll also then enter the following year at that standard rate, as well. Depending on the developers' business, however, the "standard" rate may not always be 30%. For developers running an auto-renewing subscription business, for example, the standard commission drops to 15% in year two on a per-user basis, based on Apple's existing guidelines. This will not change.
It's still discriminatory (Score:5, Insightful)
So if you provide Apple with any real competition for one of their apps, Apple will charge you more than lesser developers? That's openly anticompetitive.
Re:It's still discriminatory (Score:5, Insightful)
Looks like an attempt to divide the opposition. Right now, nearly all developers are against Apple (probably), but the vast majority do far less than $1M in sales, while the biggest developers do far more than $1M in sales. By splitting the fee structure, they get a maximal reduction in developer opposition with a minimal reduction in revenue. (This comes as no surprise, since market segmentation is Apple's bread and butter, and they do it better than any other company on the planet.) $1M also sounds like a nice big number to the average Joe, which bolsters the appearance of "looking out for the little guy" -- nevermind the fact that the average small business does far more than $1M in revenue.
Honestly, I don't believe Apple (or Microsoft, or Sony, or Nintendo) should be permitted to gate-keep software on their platforms. It's anti-competitive, anti-consumer, and undermines the very notion of ownership. If they want to provide an option that's fine, but disallowing competition is unacceptable. Just because someone sells me a TV doesn't mean they get to decide what I watch (or don't watch). If congress really wants to break up "big tech," they can start by separating hardware and software. (Of course they don't really want to do this; they just want to manipulate big tech for political gain, but that's a separate problem unfortunately.)
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"Honestly, I don't believe Apple should be permitted to gate-keep software on their platforms."
They don't for Mac OS.
As a consumer, you have a choice. Don't buy an iPhone. All the Android phones are better anyway according to the Android fanbois.
Re:It's still discriminatory (Score:5, Insightful)
As a consumer, you have a choice. Don't buy an iPhone.
But as a developer, you have no choice but to recognize that many people own iPhones.
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So? You still don't have to develop for them. You can try to build a business selling to people that don't own iPhones; I'm sure there are plenty of Android-only developers that make a living. Or Mac-only or Windows-only devs. That's an absurd argument. I'm a programmer and I'm not releasing apps for the App Store because that's not what I want to do for a living and I have options.
Yeah, many people own iPhones. Many people also own Toyotas, or cars in general. That doesn't mean I have to make software or w
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You're vastly overstating things.I can't speak for say the average business app, but as a game developer, the vast majority are doing under $1M/year. This will be a big deal for a lot of developers.
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Well what do you propose as the ideal solution?
And lets see if someone can twist your solution around to make it seem like it is purely an evil decision.
The Mobile App Market isn't really a good business to be in.
1. Mobile App users are cheap. Going back to the old day of shareware (which was considered cheap crappy software, before Apogee) It wouldn't be uncommon for a registration fee of $5.00 - $25.00 for the software. Granted not to many people registered Shareware Apps, but that was the market price
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and if we had app store back then games like
Leisure Suit Larry
would of been banned for being to adult
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Well what do you propose as the ideal solution?
Allow me to side-load apps. Done.
At the moment, if you want to distribute an app for the iPhone, you have to play by Apple's rules. So if Apple makes using the App Store optional, developers can distribute their apps themselves if they don't like Apple's rules.
Problem solved.
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Well what do you propose as the ideal solution?
Allow me to side-load apps. Done.
Make it a web app, and you can.
Web platform capability (Score:2)
Make it a web app, and you can.
A rich collection of third-party web apps in fact was Apple's plan for iOS 1. Realizing it took over a decade, as it became practical in mid-2018 when Safari gained support for Service Workers. Compared to Chrome for desktop and Android, how far behind in web platform capability [web.dev] is WebKit for iOS?
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You can distribute your Apps yourself since nearly a decade now.
Obviously you are not an iPhone/iPad developer, or you would know that.
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Last I knew, the only ways to distribute an app on your own were to (a) distribute source code and let people build it themselves, (b) define all your customers as "beta testers" (which limits you to 100 or so customers) or (c) only distribute to jailbroken phones.
Do you know another way that I've missed?
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Enterprise license. Not sure how it is actually called.
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They usually just clone your app and bundle it with the OS too. Any good idea soon gets pilfered by Apple.
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If a developer relocates to Ireland, would they be charged an even lower fee?
Its tiered pricing, like with Epic Unreal Engine (Score:2)
So if you provide Apple with any real competition for one of their apps, Apple will charge you more than lesser developers? That's openly anticompetitive.
Like Epic Unreal Engine pricing? Where small less successful developers can use it royalty free and only the larger more successful developers have to pay royalties.
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No, not really—really big apps from big developers also get charged only 15% (or better; whatever they can negotiate).
Also, Apple doesn't really care if your app is better than theirs—see the zillions of mail and calendar applications in the app store—they just want their cut. This is honestly much simpler than that: it's good press, with a good cut for devs, which means more money in the long run for Apple. They WANT you to succeed, because if you succeed and make lots of money, they take
It's still discriminatory, even if Epic does it! (Score:2)
This license is free to use and incurs 5% royalties when you monetize your game or other interactive off-the-shelf product and your lifetime gross revenues from that product exceed $1,000,000 USD.
Up until 1st January 2020, Epic didn't have the $1M waiver and there must be a reason for this. IANAL but Apple emulating the model of Epic Games openly (and bettering it) here is genius because Epic won't want to cut off their nose to spite their face. There is no way they are going to want to risk any kind of antitrust ruling which could make their own discriminatory business model illegal in the process. The reason I say this is because Epic are technically abusing their
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With that said, this move by Apple helps end users and developers alike.
It primarily helps Apple, if it allows them to dodge a completely reasonable lawsuit over anticompetitive practices. But what would really help end users and developers alike would be allowing sideloading, which presents zero security risk to users who don't use the functionality.
PR Move that does nothing (Score:2)
This is just a PR move which does nothing to address the very real concerns people have consistently brought up. It is a distraction which has no real impact on Apple's business. Don't fall for their corporate propaganda.
Prediction: (Score:3)
In a few years, Apple will be accused of keeping small businesses down because the financial hit these small businesses will take when they make more than $1M will be too difficult to withstand...It's like low income housing... it may not be designed to keep them poor, but it ends up having that effect.
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Or just create a new company per product. And the result will be that it's like Amazon, where the quality is crap because if people hate the product, they can just tear down the listing, change the brand name, and go back to selling junk until people notice again.
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Hell, you could probably automate it. Create a script to form a new company and sell the rights and transfer ownership as soon as sales approach $900k.
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Don't forget that it costs $100/yr per registered account to be able to sell on the App Store.
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$100 per million dollars in revenue? Peanuts. :-)
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That only works in countries where companies are "cheap".
The cost to form a company in Germany is around $7k - and keeping it afloat is minimum $2k per year.
France is even more expensive.
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Well, if you pay 15% for $999,999 revenue that is $149,000. Your earning: $850,000.
If you pay 30$ for $1,000,001 revenue, you end with $300,000. Your earning: $700,000.
A classic f--- you to Epic (Score:3)
I love it. Apple definitely knows how to play the PR game better than Epic.
Epic: We'll cut our own customers off to start a trade war because we don't want to pay industry rates.
Apple: We'll give little guys a discount on industry rates.
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I love it. Apple definitely knows how to play the PR game better than Epic.
Epic: We'll cut our own customers off to start a trade war because we don't want to pay industry rates. Apple: We'll give little guys a discount on industry rates.
Its even better than that. Apple is adopting tiered pricing. The same sort of pricing scheme that Epic uses for Unreal Engine. Low revenue pays less, high revenue pays more.
Divide and conquer (Score:2)
Basically Apple is buying off the small indie developers from their spat with Epic.
No its tier pricing, like Epic Unreal Engine (Score:2)
Basically Apple is buying off the small indie developers from their spat with Epic.
Nope its just tiered pricing. Like with Epic's Unreal Engine.
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How about 1% for under 100k/yr in sales?
Totally! And they should pay you to double your revenue as long as your company makes less than $100 that year.
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Imagine you make $60K in sales for the year and you have to cut Apple a $9,000 check for basically the equivalent of $60 in hosting costs.
Somebody's not getting ballet lessons this year.
That it was $18,000 until today doesn't discount the fact that Apple is among the most regressive companies on Earth.
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Show me a "hosting service" for $60 per year that does:
1) billing
2) automatic refunds
3) keeps an "backup" of the purchase, so the buyer can re-download it
4) sums up the vat - pays the vat to the authorities
5) sums up my sales
6) puts my money on my account
And: I do not even need to know who bought my software.
Seriously, you seem not to get what a "Store" in our times is, may it be "Play Store" or "Apple Store".
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Then they would make a loss. They probably make a loss already at 15%.
How about... (Score:1)
The apps that they decided to block just because?
Like Retroarch or Synology DS Get?
When they allow sideloading, then we can talk.
Apple Favoring Some Developers Over Others (Score:3)
So much for Tim Cook's claim that Apple doesn't favor some app developers over others and that every app developer is treated evenly.
https://twitter.com/cbseveningnews/status/1288542307608940544
Representative Henry Johnson: Mr. Cook. Does Apple not treat all app developers equally?
Tim Cook: Sir. We treat every developer the same. We have open and transparent rules. It’s a rigorous process. Because we care so deeply about privacy and security and quality, we do look at every app before it goes on. But those rules apply evenly to everyone.
Representative Henry Johnson: Some developers are favored over others though, isn't that correct?
Tim Cook: That is not correct.
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So much for Tim Cook's claim that Apple doesn't favor some app developers over others and that every app developer is treated evenly.
Well to be fair he was speaking of the past not the future.
If you want a real argument you might want to think about how paid and free app developers were treated differently. The paid apps subsidizing the free app. Then again one might have to look at the quote and its context again, perhaps the conversation was only about paid developers.
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If you want a real argument you might want to think about how paid and free app developers were treated differently. The paid apps subsidizing the free app. Then again one might have to look at the quote and its context again, perhaps the conversation was only about paid developers.
The rules are the same for everyone. If you don't like subsidising free apps, make your app free. If you don't like not getting paid, make your app paid. The same rulebook applies before and after.
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If you want a real argument you might want to think about how paid and free app developers were treated differently. The paid apps subsidizing the free app. Then again one might have to look at the quote and its context again, perhaps the conversation was only about paid developers.
The rules are the same for everyone. If you don't like subsidising free apps, make your app free. If you don't like not getting paid, make your app paid. The same rulebook applies before and after.
Yes, the rules were the same for everyone, two classes of devs which were treated differently: free and paid.
Yes, the rules are are the same for everyone, three classes of devs which are treated differently: free, less than $1M revenue and greater than or equal $1M revenue
Everyone is treated the same as they may choose which class of developer they wish to be.
By the way, I find nothing wrong with this. And amusingly it is also the sort of thing Epic does with Unreal Engine licensing. Formerly no roya
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Re: Apple Favoring Some Developers Over Others (Score:2)
Apple loves to spin negatives. Rather than âoeif a developer makes more than $1M we charge them doubleâ they will say âoeif a competitor makes under $1M we charge them half.â Either way these fees are still 4 to 5 times higher than normal internet payment processing fees.
Thatâ(TM)s because they do far more for the App Store Publishers than just Payment Processing.
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Either way these fees are still 4 to 5 times higher than normal internet payment processing fees.
If we accept that as a valid position then why not complain that all retail stores charge more than their costs + payment processing fees?
Stores are entitled to make a profit for the service they provide and 30% is considerably less than the markup in many other sectors. Just take clothing that is generally marked up 200% and more at the retail end.
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"If we accept that as a valid position then why not complain that all retail stores charge more than their costs + payment processing fees?"
The answer is right in your question. "All retail stores" as in multiple stores -- are competing; ensuring that the profit taking isn't monopolistic and anti-competitive.
Nobody expects a business to operate without the expectation of profit, otherwise the business would just close up shop.
However, when the profits are significant enough someone else enters the market to
How long till... (Score:1)