Apple will reduce App Store cut to 15 percent | Hacker News Reader

Apple will reduce App Store cut to 15 percent

theverge.com

67 pointsbkmn30 comments

So the small apps, where Apple has to spend more hours of work for every dollar of revenue, get a discount. And the big apps, where all they have to do is transmit more copies off their servers, don't get a discount.

I have no idea what Apple's plan is between this and the Epic fight, but it's fun to watch!

> I have no idea what Apple's plan is between this and the Epic fight, but it's fun to watch!

Their plan is to turn down the political heat/volume coming from the underdog stories (David vs Apple), which are potentially endless in numbers. Apple risks a PR death by a thousand cuts from all the negative stories, a never ending bad PR run. Few have sympathy for the giant companies and conflicts between giant companies, so Apple isn't too worried about big apps not getting further discounts. The media loves to write underdog vs big bad giant corporation stories, they sell (and draw a lot of unnecessary anti-trust attention); Apple wants to throw water on that first and foremost.

Seems reasonable, lower the barriers to entry to expand your reach & tax the rich to generate the revenue basically. Plenty of business have models like this, where start-ups and small companies get a much lower price then 'enterprises'.

And it's not like Epic isn't making enough money of their apps I'm going to assume.

The Epic fight is just Epic making PR for themselves, it's not a real case.

It doesn't have to be a real court case to be a real fight.

And they're also making PR against Apple's cut which is a very good thing.

Revenue across the App Store has a power law distribution. This discount has minimal financial impact on services revenue and results in a massive boost of goodwill for the platform.

I guess the volume of smaller apps is way more than bigger ones, maybe bigger ones are able to take advantage of easy to CDNs than storing lots of unique apps globally?

"The new App Store Small Business Program, as it’s called, will allow any developer who earns less than $1 million in annual sales per year from all of their apps to qualify for a reduced App Store cut of 15 percent, half of Apple’s standard 30 percent fee, on all paid app revenue and in-app purchases."

Reminds me of:

https://en.wikipedia.org/wiki/Progressive_tax

Is it planned to be progressive or is the 30% cut taken on the full amount if developer revenue exceeds the $1M threshold by 1 dollar?

From Apple's site:

1. 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.

2. If a participating developer surpasses the $1 million threshold, the standard commission rate will apply for the remainder of the year.

3. 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 $1 million threshold is defined as post-commission

The final details aren't published yet, but by based on what Apple has published you only qualify if you made less then $1m during 2020. If you exceed $1m at any point during the current year all sales for the remainder of that year are charged 30%. The following year all your sales from day 1 will be 30% for that entire year. If you fall below $1m for that year then you can reapply to qualify for the %15 fee for the next year.

Since Apple is playing tax code, this should have been a gradual increase, because reaching a million in sales suddenly will cost you 150,000.

Ah, who are we kidding? The vast majority of developers will never sell that much.

Title should be changed to add a qualifier, such as "Apple will reduce App Store cut to 15 percent on first $1m of revenue"

Except that that is not what's happening here.

This is finger to Epic games

Is it? Because Epic has been arguing how the 30% is excessive and now Apple is lowering the App Store cut for (some) developers.

Yeah, but not for Epic. Epic who should eat there words, because they started by asking for a discount because they are big fish. Only after Apple said no, they started to complain publicly hehe

And after Epic started complaining publicly, Apple reduced their cut to 15% for most developers. Previously Apple just crossed their arms and told how incredibly fair and justified their 30% cut was.

More like an admission of defeat ;) After all 15% is still higher than the highest EGS tax which is 12%. Good news nonetheless.

Why would you think it's an admission of defeat when Epic Games won't qualify for the 15%? To those that haven't read the article:

> The new App Store Small Business Program, as it’s called, will allow any developer who earns less than $1 million in annual sales per year from all of their apps to qualify for a reduced App Store cut of 15 percent, half of Apple’s standard 30 percent fee, on all paid app revenue and in-app purchases.

But this whole fight was never about Apple's cut, but rather about Tencent (and other Chinese apps) risking getting kicked off the App Store and thus needing to put pressure on Apple to allow third-party app installations. But since Trump lost the re-election then they probably don't have to worry anymore.

That's a bit too far into the tinfoil-hat territory. Apple had to do something to counter the mostly bad publicity for them around the whole App Store topic. But they can't simply reduce the store tax for everyone, because this would cut their App Store revenue in half overnight. The vast majority of apps on the app store most likely make a lot less than 1 million/year, while the vast majority of profits is made through a "handful" (well ok, probably a few more then that) massively big apps, so this announcement probably won't make a big dent in Apple's App Store revenue (but will make a lot of indie devs happy).

I think that the real prize Epic is after is introduction of independent app stores. 30% tax is just a convenient vehicle they're using for that (not mentioning that they pay that tax on consoles without a word).

Duplicate - already at the top of HN. https://news.ycombinator.com/item?id=25135410

Main discussion here: https://news.ycombinator.com/item?id=25135410

original press release:

https://www.apple.com/newsroom/2020/11/apple-announces-app-s...

Just imagine the profits we've lost over the years.

Thank you Epic

Really awesome by Apple! That is fantastic.

15% should be the top rate, with small developers at 5-10%

30% is just obscene and has zero justification other than pure unadulterated greed

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