Buzz
Apple has never openly disclosed the 30% commission they collect from app developers when apps make sales. Naturally, Apple's commission is a given, considering they're in the business of providing a platform for developers to reach tens (or hundreds) of millions of users, and they have the right to profit from it. Operating such a platform to make it a place where users are willing to spend money is no simple task.Apple has never publicly revealed how they use this 30% revenue, and it's nearly impossible to know for sure. These are the things we know and can analyze about why Apple charges a 30% commission on apps (and Google does the same, for the same reason), and how they might allocate it.Note: Here we're discussing the 30% commission on app and in-app content sales. For subscription services (e.g., Netflix), Apple only takes a 15% commission, which is not within the scope of this discussion.Platform Operational Costs
Of course, like any marketplace, both parties need to collaborate for users to spend money. Apple can't just sit back and wait for money because without apps, users have nothing to buy. And developers can't just sit idle; they need to create quality apps. It's a symbiotic relationship where both parties must work together to earn money from users.Supporting Software Developers
Apple always values its software developer community within its ecosystem. Evidence of this is their annual WWDC developer event, a tradition they've upheld for a long time. Apple also allocates significant resources, including prime real estate on the App Store, to promote excellent apps and popular applications. This is part of their effort to support the delivery of quality apps to users. Over the past year, Apple has also focused on boosting marketing through email, Facebook, and Twitter for popular apps. You've probably received promotional emails from Apple advertising apps, haven't you?They also organize smaller-scale events, tailored to specific countries or regions, to disseminate their development tools, conduct training sessions (both online and offline), as well as sponsor various app development programs for students, startups, and more.Funds for Continuing Platform Development
And naturally, Profit is Indispensable
Anyone in business seeks profit, and Apple is no exception. Whatever their reinvestment strategy may be, there will always be a portion of profit retained by the company. Apple's revenue from App Store commissions is significant. They also have a multitude of investors awaiting returns.It's all part of the game, isn't it? If you join someone else's playground, you play by their rules and pay up. You can choose not to play, but then you'll lose a substantial customer base. The kicker is, iOS users are more willing to spend money than Android users 😁 And this is something Apple has achieved through its product development strategy, a value that Google Play is still trying to catch up with.If you look back at Apple's history, they've been able to create products beloved by users, build a large community of loyal fans, and make them willing to 'worship' Apple with their money. However, Apple has never been a company solely focused on pleasing partners or content producers. They prioritize users and experience over these partners. And Apple should remain so, because when they cater to users, users are happy, they're more willing to spend money, and that's when partners have the opportunity to make more money. Providing a poor experience means losing users.Besides the App Store's 30% cut, here are the commission rates from a few other app markets:
- Google Play Store: 30%
- Microsoft Store: In the past, Microsoft also took 30%, and there was a time when they only charged 20% when developer revenue was ≥ $25,000. Now they only take a 15% commission (however, many important apps are not on the Microsoft Store but are released separately, indicating Microsoft's weaker influence).
- Microsoft Store and Xbox Games: Still at 30% commission
- Steam: This game platform takes a 30% commission for the first $10 million earned by game developers, then 25% for $10-50 million, and 20% for over $50 million.
- Epic Store: Epic's game platform takes a 12% commission
