Apple is cutting fees at its app store in half for most developers. Developers who produce up to $1 million in revenue from their apps will be charged 15% instead of 30%. This is likely to be the first of the fee cuts at Apple and Google.
EU regulators are likely to crack down on what is clearly monopolistic behavior by Apple. As one app developer puts it, “If you’re a developer making $1m, Apple is STILL asking to be paid $150,000, just to process payments on the monopoly computing platform in the US. That’s obscene!”
Without a stable source of revenue from services, Apple’s inflated P/E ratio is likely to come back down to earth.
Apple Inc. is cutting by half the fees charged to most developers who sell software and services on the App Store, marking the biggest change to the store’s revenue structure since the iPhone maker launched the service in 2008. That wasn’t enough for some developers.
The company is lowering the App Store fee to 15% from 30% for developers who produce as much as $1 million in annual revenue from their apps and those who are new to the store. The change will go into effect Jan. 1 as part of an App Store Small Business Program, Apple said Wednesday in a statement. The new structure will apply to the “vast majority” of developers who charge for apps and in-app purchases on Apple’s devices, the company said. It won’t affect major apps, such as those from Netflix Inc. and Spotify Technology SA.
The Cupertino, California-based technology giant said it’s making the change to help small developers financially and to provide a way for them to invest in their businesses amid the economic struggles caused by the Covid-19 pandemic.
Apple has faced ongoing scrutiny from government regulators and criticism from developers about the percentage of revenue it takes for App Store purchases. Alphabet Inc.’s Google also charges similar fees to developers on its Android app store.
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