The cost of doing business: Apple’s App Store fees explained
The App Store is a powerful digital ecosystem.
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The App Store has
an enormous reach, enabling developers to access billions of users. But, there is confusion on how much Apple charges — and on what.
The 30% fee on App Store purchases is
often criticized because it's also the only way most apps can accept payment on Apple devices. So, to what exactly does Apple's fee apply, and to what does it not?
On the iOS, iPadOS, watchOS, and macOS App Store, Apple charges a 30% fee for apps and in-app purchases. However, the fee doesn't apply to free apps.
charged at 30% for the first year, which then drops to 15% for subsequent years.
Developers can also apply for the App Store Small Business Program. Under this scheme, if your
business makes $1 million or less in a year, you qualify for a reduction of the fee to 15%.
Once your business income surpasses this threshold in a given year, the standard
30% rate applies for the rest of the year. However, if your income drops below $1 million, you can re-qualify for the scheme the following year.
Things for which App Store fees
App Store fees only apply to digital goods and services, so this excludes physical goods, such as ordering on the Amazon app, food from DoorDash deliveries, and
tangible services like Uber rides.
However, there are some interesting specifics. As is normally the case, the devil is in the detail, but so is salvation... if you're
That's because Apple has made a series of concessions over the years, either of its own volition or due to legal compulsion.
Paid boosts to social media posts incur the in-app purchase fee, but apps for the sole purpose of buying and managing advertising campaigns do
Additionally, "reader" apps — those used to consume previously purchased content such as news, books, music, and video — are also exempt from App Store fees on that
The weird case here is for game streaming apps, such as Google's Stadia and Microsoft's Xbox Cloud Gaming. Technically, they are allowed on the App Store without the
subscription incurring a fee, but there are some difficult hoops through which you'd need to jump.
The main one is Apple's stipulation that "Each streaming game must be
submitted to the App Store as an individual app so that it has an App Store product page, appears in charts and search, has user ratings and review..."
That's a lot of work,