App Store, less withheld for small developers

App Store, less withheld for small developers
Apple reaches out to small developers with a very important and radical policy change on its App Store: starting from January 1, 2021, Apple's withholdings from app sales will be reduced by 50%, thus decreasing from 30% of the total to just 15%. This privilege will be offered to all developers who grossed less than $ 1 million from app sales on the Cupertino store during the year.

Apple lowers App Store "taxes"

Although this is a sudden and conspicuous change of direction, many aspects are not clear. It's unclear why this move, for example, although Apple is confident it wants to leave more revenue for small businesses to allow them to invest more in app development and their underlying economic ecosystem. It is also not clear why the cut was not made automatically, but is instead linked to a necessary explicit request from the developer. Finally, it is not clear how much percentage of developers involves the novelty (presumably most of it) or what it implies in terms of economic impact both for Apple and for the many partners working on the marketplace.

The reasons behind this decision will only be clear over time, when Apple makes its intentions understood and when the first consequences of this change - certainly not insignificant - on the rules of the App Store will be measured.

The new rules

To be clear are the conditions of the new policy, according to which:

developers who have accrued revenues of up to $ 1 million in 2020 they will be able to request access to reduced commissions; developers who in 2021 will exceed one million after requesting the reduction, will see the reduction canceled in the remainder of the year; developers who drop below one million in 2021 will be able to apply for the reduction the following year. The two differentiated bands will therefore see small developers align themselves with the 15% fee, while large developers will remain on the current share of 30%. The million euro threshold is not calculated on the single app, but on the totality of the apps deposited on the marketplace by each single depository.

The consequence will presumably be an undergrowth of small developers encouraged by the improvement fee, encouraged to invest for make your business on the marketplace even more profitable; for the others, however, nothing will change compared to today, except in terms of competition with respect to new entrants helped by the lower percentage of withholdings required.

Source: Apple
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