Apple warns investors that reducing App Store fees would affect revenue

As some developers are pushing Apple to reduce or even remove the App Store commission, the company has now alerted its investors that a potential change in App Store fees would affect its financial results. Bloomberg reported that the warning was sent to Apple investors in a regulatory filing this Friday.

Since the App Store was introduced in 2008, Apple has charged developers a 30% fee for each sale made within its online store — this includes apps and in-app purchases. Developers have been asking Apple to reduce App Store fees in recent years as they consider it too expensive.

While the company has allowed recurring subscriptions to pay only 15% commission after the first year, most sales through the App Store sales system still pay the 30% fee. Now, Apple has told its investors that any reduction to this 30% App Store commission will significantly impact their earnings and consequently the company’s financial results.

Here’s what the company said:

If the rate of the commission that the company retains on such sales is reduced, or if it is otherwise narrowed in scope or eliminated, the company’s financial condition and operating results could be materially adversely affected.

The company yesterday announced the fourth fiscal quarter 2020 results with revenue of $64.7 billion and $12.67 billion in profit. The services category itself recorded $14.55 billion of revenue versus $12.5 billion in the same period last year. These numbers, of course, include earnings with the App Store.

A few months ago, Fortnite was banned from the App Store after Epic Games released a new update that bypassed Apple’s in-app purchases system to evade the 30% commission. Epic is now suing Apple as it claims the company acts as a monopoly by forcing developers to pay App Store fees. Apple has also been facing antitrust investigations from the U.S. House Judiciary Committee.

At least for now, Apple clearly has no plans to reduce App Store commission for developers.

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