Apple Gave Developers a 21% Pay Raise

Apple’s Small Business Program launches in 2021, raising developer profits by 21% and here are some thoughts.

So it seems that the once thought written in stone developer agreement between Apple and Developers has had a correction made. If you haven’t already heard, Apple has launched what they are calling the Small Business Program. The gist is that under this new program Apple’s commission will reduce from 30% to 15% for developers earning under $1,000,000 (net, after Apple’s commission) during the previous calendar year. This reduction results in a 21% revenue increase for 98% of developers currently on the App Store, as most likely aren’t making anywhere near the million dollar threshold.

You Can’t Please Everyone

While most of the developer community is happy to hear of the change coming from the launch of this new program, there are some cynics just looking to find places to poke holes in it and burst everyone’s happy bubble.

One argument I have heard is that for developers just under or the threshold, they will have a more substantial “loss” in revenue. Now as first mentioned, this would likely affect a tiny number of accounts (if any at all). I would think that most developers are making under a million, with those making over, making way over. But my first response to them would be that you are currently and have always been operating your business under the current 30% commission agreement, so why would staying the same change anything.

Now for maybe those very few who released the right app at the right time. If you managed to have such great fortune to make a million dollars in a year from the App Store, count yourself among the lucky few able to accomplish such a feat. And instead focus on growing your business so that the growth rate exceeds this difference in commission.

What Are Apple’s Motivations?

Now the only people who could answer this question truthfully is the inner circle within Apple. But there is a lot of speculation amongst the developer community that this new program is being launched to build good faith in the face of any possible anti-trust charges being brought forth. Now, none of that is new information. Some think it also has a lot to do with coronavirus and the impact it has had. While both may have factored in the decision it is hard from some to believe that they would implement a program potentially costing them billions per year just to be nice. Keep in mind apple is a trillion dollar company so sounds a bit crazy to say, but what is a few billion?

For several years now there has been a lot of talk that Apple has basically reached the level of having a monopoly. Some think it unfair that developers are not able to handle payments outside the App Stores In-App Purchases (which come with Apple’s cut) and some think this is what makes the user experience Apple (seamless, predictable, safe, etc.). Regardless of where you fall in that debate, this new program has seen mostly a positive reception. With developers struggling to make a decent return for their efforts on the App Store this increase is greatly welcomed.

What Now?

The program officially begins January 1st, 2021, and while there are a number of questions surrounding the program. Questions such as what does this mean for the future of the App Store, how are accounts going to be handled for those who may be listed under personal and business accounts, how does one register, why did they do this? Like everything else we’ll have to take a wait and see approach, and watch while Apple unveils their larger plan (if there is one). But while your waiting bask in the increased profits and maybe but a little bit away for a rainy day.