by Dan Moren
Apple opens App Store Small Business Program enrollment for reduced cut
The new App Store Small Business Program is designed to accelerate innovation and help propel your small business forward with the next generation of groundbreaking apps on the App Store. It features a reduced commission rate of 15% on paid apps and in-app purchases, so you can invest more resources into your business to continue building quality apps that customers love.
The details promised by Apple about its reduced commission program for small businesses on the App Store have rolled out, and they are largely consistent with what was announced last month. Eligible businesses—those that have made less than $1 million in 2020—can apply for a reduced commission of 15 percent in 2021. If they cross that line, they will go back up to 30 percent for the remainder of the year and the following year; businesses whose proceeds drop below $1 million in a calendar year can reapply for the subsequent year.
Further details clarify that the program takes affect by January 1 if you apply by December 18; beyond that, there’s a bit of a lag time. Apple also spells out how developers whose bank accounts aren’t in U.S. dollars can figure out if they’re eligible and details about Associated Developer Accounts. The company also notes that app transfers (i.e. transferring an app to another developer account) is not allowed while in the program, no doubt to prevent people from bouncing their app around to different developers to avoid the higher commission.
It will be interesting to see precisely how this plays out, but chances are the biggest question will be a year from now, with developers hovering right around that $1 million mark. Will they pull their app from the store to avoid crossing the line? How will that experience go for users, and will Apple want to make changes to avoid that kind of behavior?
Recent third-party numbers suggest that the Small Business Program could cover as many as 98 percent of developers on the store, which certainly seems like a net positive. But it’s clear from the way Apple has set this up, that despite the vast majority of developers the deal will cover, it’s still treating it as an exception, rather than the rule.