Apple's New App Store Fee In The EU Will Financially Damage Some App Developers

By Md Baber Khan

 


1. iOS 17.4 Changes: The upcoming iOS update in March for EU iPhones will bring significant alterations to iOS, Safari, and the App Store.

2. Third-Party Access: Apple will allow third-party app stores and in-app payment platforms on iPhones, breaking away from its traditional walled garden approach.

3. Reduced "Apple Tax": The "Apple Tax" on developers will now have a lower range of 10%-17%, compared to the previous 15%-30%.

4. Global App Store Revenue: The EU contributes only 6% of the global App Store revenue, and Apple plans to introduce new fees to compensate for the reduced "Apple Tax."

5. New Fees Introduced: Apple will charge a 3% in-app purchase billing fee, and a "core technology" fee of 50 Euro for each app installed over one million times.



6. Revenue from Core Technology Fee: The "core technology" fee will generate revenue from apps that did not contribute to Apple's income before, potentially impacting popular apps like Instagram.

7. Spotify CEO's Concerns: Spotify CEO Daniel Ek expresses concerns about the new fees, stating they could significantly increase customer acquisition costs, making it challenging for Spotify to remain profitable.

8. Impact on Small Developers: The new "core technology" fee is predicted to disproportionately affect smaller developers, with some suggesting it could make certain app development financially unfeasible.

9. Developer Criticism: Developers, including Steven Troughton-Smith, voice concerns that free or freemium apps with substantial installations may struggle to accept Apple's new terms without facing financial challenges.

10. Option for Developers: Developers can avoid the new fees by adhering to the current 15%-30% "Apple Tax" range, provided they refrain from using third-party payment platforms or listing in third-party app stores.



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