Ever play SimCity? It’s a fantastic city-building simulation. It teaches an incredible lesson about taxes. The experience is almost counterintuitive. By lowering taxes, you can actually make more money — and make the citizens much happier. You can’t drop it to zero, as the city still needs money for maintenance and future growth, so the trick is to hit the sweet spot. I believe that’s what Apple has announced today. Starting next year, Apple’s App Store commission rate (for small businesses) will drop from 30% to 15%. That’s huge!
Fellow NYC resident, and popular Mac repairman, Louis Rossmann knows all about high taxes. Many of his YouTube videos explain about the absurd expense of NYC living. When not ranting about the high cost of property, or fighting for the “right to repair”, he does discuss current events in the land of Apple hardware and software. Today, he said something particularly profound.
I think anytime a company makes a step in the right direction, or does something in the direction that you think is a good one, you should reward them and let them know they did a good thing.
Source: YouTube
That’s the purpose of this article. It’s to let Apple know that this change is appreciated. But more importantly, I think that it makes good business sense — not just for independent app developers, but Apple too. While anecdotal, Photics is a prime example. With 2021 mere weeks away, I’ve been wondering about the next big project. Today’s news significantly impacts that decision.
We believe that small businesses are the backbone of our global economy and the beating heart of innovation and opportunity in communities around the world. Launching January 1, 2021, the industry-leading new App Store Small Business Program is designed to accelerate innovation and help propel your small business forward. The program has a reduced commission rate of 15% on paid apps and in-app purchases, so you can invest more resources into your business and continue building the kind of quality apps your customers love.
The threshold is a million dollars. Developers already making over that amount won’t qualify. Photics apps haven’t reached that point. Clearly, I was just waiting for this moment to make it big. 🤪
This kind of savings could be mean up to $150,000 for a developer — in a single year. That’s the cost of a modest house in Pennsylvania. Longterm, perhaps “Widgets” has the potential to hit those kinds of numbers. But more importantly, it reenergizes my enthusiasm with Apple’s App Store. There are now several projects that have dramatically increased in potential. With a 30% cut, it just wouldn’t have worked in Apple’s ecosystem. But now, the math is looking much better. For years, I’ve been struggling to find a good alternative to Apple’s App Store. Now, I don’t have to worry about that. Now, I can just focus on making great apps.
It’s not just a 15% raise for developers, it’s a 21% percent increase. Instead of 70¢ on every dollar going to developers, it could be 85¢ on every dollar. (I really need to make that percentage calculator widget.) With how dire 2020 has been, this could be life-changing and life-improving news for many families across the globe. These are tough economic times, which makes this news especially welcome.