Every Apple App Store fee, explained: How much, for what, and when

AppleInsider

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 App Store is a powerful digital ecosystem.

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?

App Store fees

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.

Subscriptions are 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 don't apply

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 lucky.

That's because Apple has made a series of concessions over the years, either of its own volition or due to legal compulsion.

Exceptions and counter-exceptions

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 not.

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 content.

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, even if you have the rights to do so for every game.

Alternative payment processing

Following some high-profile lawsuits, Apple must allow developers to surface alternative payment methods to users in certain countries, which circumvents some proportion of Apple's fee.

So far, the only country where this policy change has been universally applied is South Korea, where developers can now use their own in-app payment system. But Apple will still take a 26% cut, and you'll probably still need a payment processor.

If you happen to be releasing a dating app in the Netherlands, you may be in luck: In this specific case, Apple must also give you the option of using an alternative payment processor, in exchange for a mere 27% fee.

Apple has been granted a temporary stay from a ruling forcing it to allow alternative payment methods in the United States. However, this is a changing legal situation so don't rely on this just yet.

Then there's Europe to consider, with its Digital Markets Act that aims to force Apple into allowing third-party payments and alternative app marketplaces, a situation Apple is apparently working to prepare for when it eventually becomes an issue sometime in 2024.

Apple's full and current guidelines, including where its App Store fees do and don't apply, can be found here.

Read on AppleInsider

rob53

I've never had a problem with Apple's 30% fee. This is nothing when comparing it to a regular store's up-charge over what they pay for their "products." I keep seeing a note in the window of a health food store that give customers a 30% discount over list price when buying in bulk, in other words, their wholesale price. This wholesale price still gives the store owner enough money to operate their store sho I continue to wonder why these chintzy developers keep complaining about a standard fee. They simple want all the money for themselves. All they have to do is charge more for their software. 

neoncat

rob53 said:

I've never had a problem with Apple's 30% fee. This is nothing when comparing it to a regular store's up-charge over what they pay for their "products." I keep seeing a note in the window of a health food store that give customers a 30% discount over list price when buying in bulk, in other words, their wholesale price. This wholesale price still gives the store owner enough money to operate their store sho I continue to wonder why these chintzy developers keep complaining about a standard fee. They simple want all the money for themselves. All they have to do is charge more for their software. 

Common in retail arrangements like you describe is the ability for the producer (the company that creates the product sold) to not only choose which retailers they want to feature their product, but to set minimum (and maximum) advertised markups. Apple does this quite deliberately, for example, setting different markups for different retailers (Amazon, for example). Apple also has an "authorized dealer" program where specific stores are granted direct access to products and marketing support. Other stores are not afforded such blessings, and are instead referred to as the "gray market," where warranty and other concerns are called into question.

You understand here how the power is ultimately in the hands of the producer. Now compare that to Apple's adversarial relationship with developers in the App Store. You don't have to agree with me whether or not that's a problem, nor am I trying to convince anyone here that's a problem, but when the snide Apple White Knights rush to defense of a two trillion one trillion dollar company and declare developers "chintzy" for not toeing the line, it's hard not to roll my eyes. There's nuance in every relationship. I don't disagree that Apple provides a valuable service to end users with how they've structured the App Store. I disagree that it's worth the cost and/or that developers receive value on their end as well. But again, we can agree to disagree. Just do so fairly and acknowledge your desire to represent your own selfish needs, the same way a developer wishes to do for themselves. 

racerhomie3

Developers should use Web sites if they want free distribution and avoid all taxes by Apple. If you are making native iOS apps with iAP or subscription ,you should abide by Apple rules. Or you should make your app free, like you know millions of apps on the App Store 

danox

neoncat said:

rob53 said:

I've never had a problem with Apple's 30% fee. This is nothing when comparing it to a regular store's up-charge over what they pay for their "products." I keep seeing a note in the window of a health food store that give customers a 30% discount over list price when buying in bulk, in other words, their wholesale price. This wholesale price still gives the store owner enough money to operate their store sho I continue to wonder why these chintzy developers keep complaining about a standard fee. They simple want all the money for themselves. All they have to do is charge more for their software. 

Common in retail arrangements like you describe is the ability for the producer (the company that creates the product sold) to not only choose which retailers they want to feature their product, but to set minimum (and maximum) advertised markups. Apple does this quite deliberately, for example, setting different markups for different retailers (Amazon, for example). Apple also has an "authorized dealer" program where specific stores are granted direct access to products and marketing support. Other stores are not afforded such blessings, and are instead referred to as the "gray market," where warranty and other concerns are called into question.

You understand here how the power is ultimately in the hands of the producer. Now compare that to Apple's adversarial relationship with developers in the App Store. You don't have to agree with me whether or not that's a problem, nor am I trying to convince anyone here that's a problem, but when the snide Apple White Knights rush to defense of a two trillion one trillion dollar company and declare developers "chintzy" for not toeing the line, it's hard not to roll my eyes. There's nuance in every relationship. I don't disagree that Apple provides a valuable service to end users with how they've structured the App Store. I disagree that it's worth the cost and/or that developers receive value on their end as well. But again, we can agree to disagree. Just do so fairly and acknowledge your desire to represent your own selfish needs, the same way a developer wishes to do for themselves. 

To sit on the shelf in any store Walmart, Macy’s, Kroger’s Costco, Sam’s Club you have to pay the fees or you don’t get to be in their store, What is the problem? Yes Apple is very successful, but they definitely are small part of the total computer market.

rob53

neoncat said:

rob53 said:

I've never had a problem with Apple's 30% fee. This is nothing when comparing it to a regular store's up-charge over what they pay for their "products." I keep seeing a note in the window of a health food store that give customers a 30% discount over list price when buying in bulk, in other words, their wholesale price. This wholesale price still gives the store owner enough money to operate their store sho I continue to wonder why these chintzy developers keep complaining about a standard fee. They simple want all the money for themselves. All they have to do is charge more for their software. 

Common in retail arrangements like you describe is the ability for the producer (the company that creates the product sold) to not only choose which retailers they want to feature their product, but to set minimum (and maximum) advertised markups. Apple does this quite deliberately, for example, setting different markups for different retailers (Amazon, for example). Apple also has an "authorized dealer" program where specific stores are granted direct access to products and marketing support. Other stores are not afforded such blessings, and are instead referred to as the "gray market," where warranty and other concerns are called into question.

You understand here how the power is ultimately in the hands of the producer. Now compare that to Apple's adversarial relationship with developers in the App Store. You don't have to agree with me whether or not that's a problem, nor am I trying to convince anyone here that's a problem, but when the snide Apple White Knights rush to defense of a two trillion one trillion dollar company and declare developers "chintzy" for not toeing the line, it's hard not to roll my eyes. There's nuance in every relationship. I don't disagree that Apple provides a valuable service to end users with how they've structured the App Store. I disagree that it's worth the cost and/or that developers receive value on their end as well. But again, we can agree to disagree. Just do so fairly and acknowledge your desire to represent your own selfish needs, the same way a developer wishes to do for themselves. 

Fine, but remember that the product these developers are selling only work on Apple products so in essence they are software contractors, nothing more. They could, and probably do, sell the same software to other mobile devices but I bet they aren't getting anywhere near the same amount of income.

As for Apple being a $1T company, AAPL has a current market value of $2.062T. Does this equate to how much they're worth? No it doesn't. It only applies to what the Stock Market and stock market investors feel their value is. 

jdw

neoncat said:
...when the snide Apple White Knights rush to defense of a two trillion one trillion dollar company and declare developers "chintzy" for not toeing the line, it's hard not to roll my eyes.

I myself am not an Apple White Knight (AWK), and I have actually been brutalized by them here in this forum.  Back when the butterfly keyboard was the only keyboard on certainly MBPs, I mentioned how much I disliked it and why, and the AWKs came running to bash me and say I need to wake up and embrace the new status quo because Apple is never going back.  They said the same about the missing SD card, loving the fact it was missing, while I hated its absence.  In the end, I won and the mockers lost -- Apple went back to a better keyboard design and restored the SD card slot, where it belongs.  Ha!

But even though I am not an AWK and never shall be a perpetual defender of the Status Quo, I am an Apple fan, as evidenced by the fact I am here writing these words.  I have also been an AAPL shareholder since 1999, never having sold a single share.  I believe many people in this forum are AAPL shareholders as well.  (It's rather foolish not to be.)  Because of that, I am well aware that we often defend Apple for the sake of AAPL, in addition to liking their products.  So when someone (not necessarily just an AWK) seems to defend that 2.06 Trillion company (current market cap as of today -- not 1.0 Trillion), someone is in effect defending their investment in AAPL.  Even if someone only owns Apple devices and lacks any AAPL stock, that someone still has an investment in Apple.  Any person who likes what they bought will naturally seek to defend the creator of that item they purchased.  It's both logical and reasonable, and not something we can so casually deem "totally selfish."

As a result, I tend to roll my eyes at those who roll their eyes at their fellow Apple fans.  We all defend Apple in some way, and for varied reasons.  And those reasons are rooted in common sense more than selfishness.  For example, if I want AAPL to succeed, people other than me benefit from that.  That is not purely a selfish act.

neoncat said:
I disagree that it's worth the cost and/or that developers receive value on their end as well. But again, we can agree to disagree.

Those 2 sentences are the bottom line and the heart of the matter.  We agree to disagree on this point.  And one doesn't have to fall into that AWK category to disagree either.

inspiredcode

I've never had an issue with Apple's store fees, but there are some rules I'm not fond of. Although I'm a Steam user, I'd like to see Xbox Game streaming allowed at least outside of the game category out of principle. I don't like that Apple requires IAP for things like one-on-one consultations through an app. There are other similar categories where it just doesn't feel right to force IAP. Out of "free" apps, Apple needs to make it easy to tell if it is truly free, freemium, trial with onetime IAP purchase, or subscription.

It is really hard to tell the price of anything on the App Store. Prices shouldn't be hidden under a disclosure button. IAP for freemium games is out-of-control. Angry Birds has $100 IAP. Allowing $100 IAP purchases should not be allowed at least not without specifically opting in to them. Freemium games also make discoverability very difficult since most of them are just reskinned versions of basically the same games and they clog up the store with unoriginal works. Freemium games generally target addictive tendencies and I think the App Store feels pretty toxic these days because of it.

I'd like to see Android-like side-loading with hoops to jump through so it doesn't become the dominant system for some niche situations like emulators, highly sensitive internal software that shouldn't go through app review, or GPL software. Hopefully that is where things are headed, but I'm not holding my breath. If there is another distribution method, maybe Apple could be a little more selective about app quality on the store too. This would also lower the risk to developers that might worry about their app being banned for arbitrary reasons.

edited January 2023

cropr

rob53 said:

neoncat said:

rob53 said:

I've never had a problem with Apple's 30% fee. This is nothing when comparing it to a regular store's up-charge over what they pay for their "products." I keep seeing a note in the window of a health food store that give customers a 30% discount over list price when buying in bulk, in other words, their wholesale price. This wholesale price still gives the store owner enough money to operate their store sho I continue to wonder why these chintzy developers keep complaining about a standard fee. They simple want all the money for themselves. All they have to do is charge more for their software. 

Common in retail arrangements like you describe is the ability for the producer (the company that creates the product sold) to not only choose which retailers they want to feature their product, but to set minimum (and maximum) advertised markups. Apple does this quite deliberately, for example, setting different markups for different retailers (Amazon, for example). Apple also has an "authorized dealer" program where specific stores are granted direct access to products and marketing support. Other stores are not afforded such blessings, and are instead referred to as the "gray market," where warranty and other concerns are called into question.

You understand here how the power is ultimately in the hands of the producer. Now compare that to Apple's adversarial relationship with developers in the App Store. You don't have to agree with me whether or not that's a problem, nor am I trying to convince anyone here that's a problem, but when the snide Apple White Knights rush to defense of a two trillion one trillion dollar company and declare developers "chintzy" for not toeing the line, it's hard not to roll my eyes. There's nuance in every relationship. I don't disagree that Apple provides a valuable service to end users with how they've structured the App Store. I disagree that it's worth the cost and/or that developers receive value on their end as well. But again, we can agree to disagree. Just do so fairly and acknowledge your desire to represent your own selfish needs, the same way a developer wishes to do for themselves. 

Fine, but remember that the product these developers are selling only work on Apple products so in essence they are software contractors, nothing more. They could, and probably do, sell the same software to other mobile devices but I bet they aren't getting anywhere near the same amount of income.

As for Apple being a $1T company, AAPL has a current market value of $2.062T. Does this equate to how much they're worth? No it doesn't. It only applies to what the Stock Market and stock market investors feel their value is. 

I am an app developer.  My most important app is an e-voting system for general assemblies of large organisations.  My app has an iOS version, an Android version an a Web based version for PC and Mac.  I am selling my app in the EU.  The income from the other platforms is 3 to 4 times more than the iOS income, so indeed nowhere near.

Considering me as a software contractor is not only horribly wrong but also an insult. The idea, the development, the marketing, the server application and hosting, the operations, ... for all of these items I am the main responsible person.  Organisations buy my app because they need a working and trusted e-voting system, not because it is available on iOS.  You clearly do not have a basic understanding of the ins and outs of app development business.

davidw

cropr said:

rob53 said:

neoncat said:

rob53 said:

I've never had a problem with Apple's 30% fee. This is nothing when comparing it to a regular store's up-charge over what they pay for their "products." I keep seeing a note in the window of a health food store that give customers a 30% discount over list price when buying in bulk, in other words, their wholesale price. This wholesale price still gives the store owner enough money to operate their store sho I continue to wonder why these chintzy developers keep complaining about a standard fee. They simple want all the money for themselves. All they have to do is charge more for their software. 

Common in retail arrangements like you describe is the ability for the producer (the company that creates the product sold) to not only choose which retailers they want to feature their product, but to set minimum (and maximum) advertised markups. Apple does this quite deliberately, for example, setting different markups for different retailers (Amazon, for example). Apple also has an "authorized dealer" program where specific stores are granted direct access to products and marketing support. Other stores are not afforded such blessings, and are instead referred to as the "gray market," where warranty and other concerns are called into question.

You understand here how the power is ultimately in the hands of the producer. Now compare that to Apple's adversarial relationship with developers in the App Store. You don't have to agree with me whether or not that's a problem, nor am I trying to convince anyone here that's a problem, but when the snide Apple White Knights rush to defense of a two trillion one trillion dollar company and declare developers "chintzy" for not toeing the line, it's hard not to roll my eyes. There's nuance in every relationship. I don't disagree that Apple provides a valuable service to end users with how they've structured the App Store. I disagree that it's worth the cost and/or that developers receive value on their end as well. But again, we can agree to disagree. Just do so fairly and acknowledge your desire to represent your own selfish needs, the same way a developer wishes to do for themselves. 

Fine, but remember that the product these developers are selling only work on Apple products so in essence they are software contractors, nothing more. They could, and probably do, sell the same software to other mobile devices but I bet they aren't getting anywhere near the same amount of income.

As for Apple being a $1T company, AAPL has a current market value of $2.062T. Does this equate to how much they're worth? No it doesn't. It only applies to what the Stock Market and stock market investors feel their value is. 

I am an app developer.  My most important app is an e-voting system for general assemblies of large organisations.  My app has an iOS version, an Android version an a Web based version for PC and Mac.  I am selling my app in the EU.  The income from the other platforms is 3 to 4 times more than the iOS income, so indeed nowhere near.

Considering me as a software contractor is not only horribly wrong but also an insult. The idea, the development, the marketing, the server application and hosting, the operations, ... for all of these items I am the main responsible person.  Organisations buy my app because they need a working and trusted e-voting system, not because it is available on iOS.  You clearly do not have a basic understanding of the ins and outs of app development business.

But the OP was only referring to OS on mobile devices. With iOS being only about 20% of the OS market in Europe, one would expect to make 4 to 5X less developing for iOS when compared to all other platform OSes  (Windows, MacOS, Android, Chrome, linux, etc). 

The real question now would be, are you making 3-4 times less with iOS, than Android?  With Android being about 65% of the mobile OS market compared to about 35% for iOS (in Europe), one would expect your income from iOS would only be about half of that from Android (with all else being equal), for no other reasons other than "marketshare". 

That's why they say that ............ there are lies, damned lies and statistics. 

 

edited January 2023

dck

AppleInsider said:

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.

Subscriptions are charged at 30% for the first year, which then drops to 15% for subsequent years.

Is the above mis-represented?  It suggests that an app that is free to download would not be charged the 30% Apple fee on any in-app purchases. 

For example, if a free to-download app sold in-game currency to use for purchasing digital goods and offered monthly paid subscription for premium services, Apple would only take 30% of the subscription fee but not in-app purchases of in-app currency. 

Is this correct?