Wednesday, November 25, 2020
Tech

Apple lowers App Store commissions in major strategic shift

Apple lowers App Store commissions in major strategic shift
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In a statement, Apple CEO Tim Cook said the program would help developers “fund their small businesses, take risks on new ideas, expand their teams, and continue to make apps that enrich people’s lives”.

Analysts view revenue from apps and services as a key driver of Apple’s business as its growth in device sales slows.

In announcing the initiative Apple said that in 2019 alone the App Store ecosystem facilitated $US519 billion in commerce worldwide. A spokesperson did not say what amount of this total could be attributed to developers making less than $US1 million per year.

Independent game developers and other sellers of digital goods have in the past complained the 30 per cent figure is too high. The App Store currently offers 1.8 million apps.

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Apple has pointed to research published this year by Analysis Group showing 30 per cent is standard across other marketplaces from Google, Amazon and Samsung. Its spokesperson said the reduced rate would help new and small-scale developers grow and reinvest, and is an extension of previous initiatives such as lowering commissions in the second year of ongoing subscription payments.

In an interview about its legal action against Apple, Epic CEO Tim Sweeney said companies like Apple and Google were only able to charge a commission of 30 per cent because they shut down or hobbled competing stores and payment processing systems on the ecosystems they controlled.

Apple and Google deny this, saying their practices are industry standard and designed to keep apps safe and trustworthy.

In August Epic introduced an alternate payment method into Fortnite on iOS that circumvented Apple’s fees and resulted in a 20 per cent reduced rate for players. This saw the game removed from Apple’s store, triggered legal action in the US.

Epic also operates its own store for video games on computers where, according to the Analysis Group report, it charges a commission of 12 per cent.



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