New program reduces App Store commission to 15 percent for small businesses earning up to $1 million per year
Cupertino California — Apple announced an industry-leading new developer program to accelerate innovation and help small businesses and independent developers propel their businesses forward with the next generation of groundbreaking apps on the App Store. The new App Store Small Business Program will benefit the vast majority of developers who sell digital goods and services on the store, providing them with a reduced commission on paid apps and in-app purchases. Developers can qualify for the program and a reduced, 15 percent commission if they earned up to $1 million in proceeds during the previous calendar year.
The App Store Small Business Program, which will launch on January 1, 2021, comes at an important time as small and independent developers continue working to innovate and thrive during a period of unprecedented global economic challenge. Apps have taken on new importance as businesses adapt to a virtual world during the pandemic, and many small businesses have launched or dramatically grown their digital presence in order to continue to reach their customers and communities. The program’s reduced commission means small developers and aspiring entrepreneurs will have more resources to invest in and grow their businesses in the App Store ecosystem.
“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 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,” said Tim Cook, Apple’s CEO. “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 program 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.”
While the comprehensive details will be released in early December, the essentials of the program’s participation criteria are easy and streamlined:
Existing developers who made up to $1 million in 2020 for all of their apps, as well as developers new to the App Store, can qualify for the program and the reduced commission.
If a participating developer surpasses the $1 million threshold, the standard commission rate will apply for the remainder of the year.
If a developer’s business falls below the $1 million threshold in a future calendar year, they can requalify for the 15 percent commission the year after.
The App Store’s standard commission rate of 30 percent remains in place for apps selling digital goods and services and making more than $1 million in proceeds, defined as a developer’s post-commission earnings. Earlier this year, an independent study by the Analysis Group found that Apple’s commission structure is in the mainstream for app distribution and gaming platforms.
Small business owners will continue to benefit from Apple’s unparalleled suite of developer tools — including development applications, programming languages, a secure payment interface, and more than 250,000 essential software building blocks called APIs. Apple is committed to giving developers the tools to turn their brightest ideas into apps that change the world. Tools like HealthKit give engineers secure access to user health data, ARKit empowers developers to explore new frontiers of augmented reality, and Core ML harnesses the speed and intelligence of machine learning to help developers build powerful features with just a few lines of code.
Earning the trust of users and developers has been an important goal of the App Store from the beginning. It’s why every one of the 1.8 million apps on the App Store undergoes a review process that developers and their customers can rely on — one that helps make sure every app is reliable, performs as expected, is free of objectionable content, and upholds the highest standards to protect users’ privacy and security.
Developers of all sizes have built successful businesses while benefitting from the App Store’s global reach encompassing users of the more than 1.5 billion Apple devices around the world in 175 countries and over 40 languages, with more than 180 local payment methods and 45 accepted currencies. In 2019 alone, the App Store ecosystem facilitated $519 billion in commerce worldwide — with over 85 percent of that total accruing solely to third-party developers and businesses of all sizes. The new App Store Small Business Program will build on that progress to generate even more digital commerce and app innovations, support new jobs, and help small and independent developers continue to bring great software to Apple users.
The App Store, which launched in 2008, is the world’s safest and most vibrant app marketplace, currently offering 1.8 million apps and visited by half a billion people each week. It helps creators, dreamers, and learners of all ages and backgrounds connect with the tools and information they need to build a brighter future and a better world.
Through the new App Store Small Business Program, qualifying small businesses that earn up to $1 million in revenue are eligible for a 15 percent commission rate — half of the App Store’s standard commission.
Developers see a world of possibilities with new App Store Small Business Program
Every week, half a billion visitors to the App Store engage with 1.8 million apps, from indie games like “Song of Bloom,” to virtual fitness coaches like MySwimPro, to coding apps for kids like Hopscotch. Many of these apps are created by independent developers driven by a single idea. Oftentimes, these developers maintain full-time careers that ultimately fund their ideas until they are launched into the real world.
Since the launch of the App Store, small businesses have been its driving spirit. Now more than ever, these businesses are core to the communities they serve, helping people stay healthy, connected, and learning. Apple unveiled the App Store Small Business Program, a new commission structure to support small and individual developers and spur innovation for the next chapter of apps.
Philipp Stollenmayer, an indie game developer with 20 titles in the App Store, is excited for the new App Store Small Business Program to help a new wave of creators launch innovative games of their own.
“This is a big opportunity for the indie gaming spirit to become truly mobile,” says Philipp Stollenmayer, a solo developer in the App Store. Stollenmayer, whose latest game, “Song of Bloom,” won an Apple Design Award in June 2020, was drawn to the appeal of iPhone as a new platform for gaming, one in its infancy and in need of its own set of standards. When his first game, “What the Frog,” launched in the App Store in 2013 and won a German Multimedia Prize (mb21), he knew he was onto something.
“I saw a whole world of possibilities and how easy it was to get something out there,” Stollenmayer says. “I had the chance to shape how mobile games work and how they differ from consoles. With mobile games, you use the phone in a much more personal way. I put that inside my games and make that active as gameplay, which is much more valuable than trying to create worlds that might not work so well on a small screen.”
“Song of Bloom” is a 2020 Apple Design Award-winning puzzle game by indie developer Philipp Stollenmayer.
With the new App Store commission structure, small and individual developers who earn up to $1 million in revenue for the calendar year are eligible for a reduced 15 percent commission rate — half of the App Store’s standard commission. The savings mean small businesses and developers will have even more funds to invest in their businesses, expand their workforce, and develop new, innovative features for app users around the world. Stollenmayer is excited about the new wave of games that may come to the App Store from people who are new to game design. “I’m most interested in games from people that didn’t make games before because they’re super fascinating,” he says. “You can publish something on the iPhone much, much easier than on any console without any obstacles. This is a super awesome opportunity for the indie studios that don’t want to take any risks.”
Fares Ksebati (left) and Adam Oxner, co-founders of the MySwimPro personal swimming coach and Apple Watch companion app, are excited to reinvest additional revenue earned from the new App Store Small Business Program into making the app better for its community of swimmers.
Beyond the world of gaming, the team behind MySwimPro is also excited about the possibilities to grow their company and expand the app’s offerings with less risk, thanks to the additional revenue that will result from the new App Store program. Co-founders Fares Ksebati and Adam Oxner, both born and raised in Michigan and both swimmers through college competing at the 100-meter breaststroke (though not against each other), met over their shared interest to build a platform that could replicate the elements of coaching swimming whether for fitness or performance goals.
“Adam and I, as well as everyone on our team — we all swim in some capacity,” says Ksebati, who is also MySwimPro’s CEO. “We try and build a community around people who use the app, because swimming is one of those things that you can do at any age, anywhere in the world. And so we are users of our own product in a lot of ways.”
Launched in 2015, MySwimPro currently has 50,000 active users who are swimmers of varying levels.
“We chose to add dryland training to our coaching experience to continue delivering value to our members,” says Ksebati. “We continue to focus on delivering a holistic coaching experience to our community members whether they have access to a pool or not.”
After spending five years building an app that started as a side project, Ksebati and Oxner have grown MySwimPro into a successful business with 12 team members around the world, and they are excited for its next chapter. “The new App Store program will be a huge help to our revenue from purchases in the App Store, and we’re hoping to be able to leverage any more proceeds we get to help make the app better,” says Oxner. “We’re looking forward to further improving the integration of our dryland workouts into the app to help swimmers who might not be able to get to a pool right now.”
Samantha John, co-founder of Hopscotch, looks forward to releasing more features to kids for free with the additional revenue earned from the new App Store Small Business Program.
Samantha John, co-founder of Hopscotch, which was the first coding language designed for iPad, sees the new App Store program as an opportunity to allow kids to do more with Hopscotch for free. “It actually allows us to take some risk that we wanted to take but we were pretty afraid to,” John says. “Specifically around our subscription, … I think it is a good strategy in terms of making money, but it also limits the audience of the app. And we’ve been wanting to walk back that paywall and let people do more for free in the hopes that farther down the line we will have even more loyal subscribers to Hopscotch.”
Started as a way to introduce programming to kids who wouldn’t otherwise be exposed to it, Hopscotch is the brainchild of John and co-founder Jocelyn Leavitt, who attended Apple Entrepreneur Camp’s inaugural class of female entrepreneurs in 2019.
“A key driving principle of Hopscotch is that we really want to respect kids as makers and creators and artists,” John says. “That’s really how we see these kids, and also as coders, so it’s very key to how we think about Hopscotch: How can we make sure that kids are able to make work that is meaningful and important to them?”
Hopscotch was the first coding language designed for iPad when the app launched in 2013.
John was intrigued by the possibilities of making programming more kid-friendly after the launch of the second-generation iPad. “There’s something about an iPad and a touchscreen and something you can hold in your hands that feels so much more personal and just so much more interesting.”
Since its 2013 launch, Hopscotch now has 200,000 monthly active users. John considers Hopscotch’s loyal users as its best content creators after seeing how kids are creating and sharing their own games and creation tools in the app. Once the App Store Small Business Program goes into effect in January 2021, John looks forward to bringing more features into the app for free.
“Hopscotch is not just a game and it’s not just an app,” says John. “It’s a skill, a creative process, just in the way some kids play violin. And as kids get older, they get better at conceiving games, better at making things fun, so Hopscotch really is a long-term investment. Having this little bit of extra revenue really lets us invest in things that we believe are going to be really essential for the future of our company.”