Apple on Wednesday (November 18) announced the new App Store Small Business Programme.
Apple's new initiative reduces commission on paid apps and in-app purchases and is scheduled to go live on January 1, 2021. It will help numerous budding app developer start-ups which sell digital goods and services on Apple App store.
However, this programme is limited developers who earn up to $1 million in proceeds during the previous calendar year (2020). They will be allowed to pay 15% for an additional year if there earnings are below the cut-off range as mentioned above. However, if the earning goes north of $1 million, the company will have to pay the regular 30% commission to Apple App Store.
"Small businesses are the backbone of our global economy and the beating heart of innovation and opportunity in communities around the world. We’re launching this programme 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,” said Tim Cook, CEO, Apple.
“The App Store has been an engine of economic growth like none other, creating millions of new jobs and a pathway to entrepreneurship accessible to anyone with a great idea. Our new programme carries that progress forward — helping developers fund their small businesses, take risks on new ideas, expand their teams, and continue to make apps that enrich people’s lives," Cook added.
This is a welcome gesture by the Cupertino-based company, as it would help small companies facing financial constraints due to the untimely Covid-19 outbreak early this year that led to shutting down of economic activities for several months across the world.
“This is a big opportunity for the indie gaming spirit to become truly mobile,” said Phillip Stollenmayer, an indie game developer with 20 titles in the App Store. His latest game, “Song of Bloom,” won an Apple Design Award in June 2020. With this, Stollenmayer and other hardworking independent developers will now have to pay just 15%, 50% less than what they had to initially pay to the host. Also, now they can divert the savings to expand their workforce, and develop new, innovative features for app users.
Coincidently, the news comes months after Apple initiated sanctions on Epic Games. In August, latter's gaming division Fortnite launched direct payment, an in-app feature for all transactions on PCs and mobiles.
This apparently violated Apple's policy and allowed a 20% discount on in-game currency (V-bucks) for customers. Even Google took objection to the Fortnite's decision. Both the technology companies blocked Fortnite game on respective Google Play and Apple App Store platforms.
In the court battle, Epic Games had pointed out that the 30% cut taken by Apple and Google were too hefty for application companies to run a successful business. Previously, Netflix and Spotify changed their subscription policy by asking customers to extend subscription only through their respective websites.
Now, Apple's new initiative looks like a masterstroke to silence the critics, who long been accusing the Cupertino-based company charging too much gate-keeper charge.