As 2021 peeks its head over the horizon (and with it, hopefully, an upward swing at last), it’s time to cast our glances to the year ahead.
While Apple has no shortage of priorities for the next 12 months, one area that seems as though it might get more attention than usual is the company’s main digital storefront, the App Store. Services continue to be good business for Apple, and the App Store is a major component of that market, but it’s also not without its challenges.
Apple has already instituted some changes to its long-running App Store practices, and recent developments have also made it clear that further changes are likely on the way. So what do we have to look forward to in 2021?
Cut it out
Apple’s newly unveiled Small Business Program aims to change one longstanding number: 30 percent. That’s the cut of App Store proceeds that Apple has taken since the store’s inception. But last month Apple announced that developers who earn less than $1 million in proceeds in a given calendar year will be eligible to apply for a reduction of Apple’s portion to just 15 percent, with some caveats.
That’s a big deal. Some analysts say that up to 98 percent of the developers on the App Store earn less than $1 million; of those that cross that line, most are large companies that earn far in excess of the number. But it does leave questions about the ones stuck in the middle.
One catch about the program is that if you hit that $1 million in a calendar year, the remainder of your year’s proceeds jump back up to that 30 percent mark—and you have to spend the next year at 30 percent. Only if the following year’s revenue drops below the $1 million mark are you eligible to apply for the 15 percent deal the following year.
That ping-ponging has some developers worried and has even led to suggestions that developers might pull their apps from the store late in the year if their income approaches that $1 million mark.
Is this a test balloon on Apple’s part? It’s hard to say. The 30 percent cut is largely standard across not only the mobile industry, but also in other digital storefronts like game consoles. Apple’s move may shine a brighter spotlight on those that stick with the 30 percent number across the board. But though Apple can pretty easily weather this reduction in their App Store income, competitors—such as console makers, who often sell the hardware at a loss and recoup their investment via these fees—may struggle.
But you can bet that Apple will be keeping a close eye on how this program goes over the next 12 months, not only for developers, but also for itself. In no small part because the App Store has some related challenges ahead as well.
Antitrust, but verify
Like the rest of Big Tech, Apple has found itself in the crosshairs of legislators and government regulators this past year. In Apple’s case, it’s because of the App Store and what some have argued are anticompetitive practices in the way the business is run.
Apple’s lowering of its cut might be an attempt to slip away from this scrutiny, but given that the complaints from developers and customers only partially involve the amount of money paid, and instead deal more with Apple’s rules and restrictions on what can and can’t be done within the store itself, the reduction to 15 percent probably won’t do much to permanently silence critics.
Add in a new government administration that might be more friendly to reining some of the Big Tech companies and it’s quite likely that the App Store is due for more attention, not less, as 2021 progresses. That said, the Small Business Program might only be Apple’s first foray into addressing these kinds of concerns–perhaps there are more changes to come.
Finally, on the technical side, we’ve moved into a new era, one where apps developed for iOS can be run on Macs built around Apple’s own processors. This means that app creators now have decisions to make about how and whether to target Macs as potential markets for their products.
So far, the iOS apps that have made their way to M1-based Macs have mostly been on the underwhelming side—they really are nothing more or less than transplants from the mobile side, with all of the pitfalls and shortcomings that accompany the move to a platform with a fundamentally different interaction model.
But the path forward is there. Apple’s Mac Catalyst system provides one option for creating iOS apps that behave like better Mac citizens, and the company has pointed to its SwiftUI system as the eventual direction for apps to run across all of its platforms. The transition to Apple silicon on the Mac is in its earliest stages, and developers will be taking a variety of different approaches to this new market. But 12 months from now, we—and the App Store—may well be in a very different places from where we are now.
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