Apple announced on Wednesday, local time, that it will launch a new policy, that is, for small businesses and independent developers whose annual income from the App Store does not exceed $1 million, Apple will reduce the App Store commission rate to 15%. However, critics of Apple said that Apple's move is just a superficial article and will not have any impact on its revenue and operating profit. Critics ask regulators not to be confused by Apple's move, and to take action against Apple's monopoly behavior to create a level playing field.

When developers sell their apps in the App Store, most of them have to pay a 30% commission to Apple. Apple said that if developers earn no more than $1 million in revenue in a calendar year, they will automatically enjoy a 15% commission rate.

Apple's App Store charging policy has been slammed by large companies such as Microsoft, Spotify, Match Group and Epic Games. These companies allege that Apple’s charging policy deprived consumers of choice and pushed up the price of apps.

In response to critics, Apple stated that its policies apply equally to developers, and the App Store provides a convenient way for developers’ applications to be used by Apple’s large user base.

Apple's new policy will affect a large number of developers, but the extent of its financial impact is still unclear.

Moody's estimate is that lowering the commission rate will have an impact of less than 1% on Apple's revenue and operating profit. This new policy will benefit a large number of small businesses and independent developers.

Moody's senior credit officer Raj Joshi (Raj Joshi) said, "Apple announced that it will halve the commission rate for software developers who earn less than $1 million from the App Store each year. This is positive news."

Based on its research data, analytics company Sensor Tower said that 97.5% of iOS developers earn less than $1 million per year. But these developers only contributed 4.9% of App Store revenue in 2019.

However, Apple analyst Gene Munster of Loup Ventures, a research firm, estimates that the small developers covered by Apple's new policy are the source of 20% of Apple's App Store revenue. He lowered Apple's App Store revenue forecast for the next fiscal year to $14.2 billion, which is a decrease of $1.6 billion from the previous estimate, accounting for about 0.5% of Apple's total revenue.

The App Association, an industry organization sponsored by Apple, said in a statement that “the reduction in commissions for small businesses and independent developers will enable them to invest more resources in expanding and innovating new products and services.”

Match Group said that Apple’s policy still forces developers to use its payment system, and Apple is also competing with these developers.

Match Group said, “If small businesses and independent developers earn more than $1 million from the Apple App Store, then the commission they give to Apple will double at once, which makes it very difficult for startups to maintain growth.”

Spotify has filed an antitrust lawsuit against Apple in Europe. In response to Apple’s new policy on app store commission rates just announced, Spotify hopes that “regulators will ignore Apple’s “superficial articles”, but will take urgent measures against Apple’s antitrust actions to protect consumers’ choices and ensure fair competition. And create a level playing field for everyone."

Apple said that the new policy will take effect on January 1 next year. Apple also said that it will provide more details on the new policy next month to further explain which developers are eligible to enjoy the new policy. (Tianmen Mountain)

Source: NetEase Technology Report, translated by Google Translate