Surprise, Apple Did Consider Cutting App Store Fees After All
According to Epic’s opening slideshow showing internal emails between Apple’s top brass, that executive is none other than Phil Schiller who happens to manage the App Store. One of the emails reveals that Schiller himself floated the idea of cutting the App Store commission once the App Store hit $1 billion in profit.
From Schiller’s emails to Apple’s Eddy Cue, as reported by Bloomberg:
Schiller was only right in that the App Store’s fee structure would become a point of contention in the future. He, however, failed to realize that the challenge would come from a games maker with an ambition to run its own App Store.
Shiller’s email continues:
Then comes the proposal to cut the App Store fees once a profit threshold is reached:
An Epic-backed expert pegs the App Store profit at 78 percent, a figure Apple is disputing. Tim Cook claims Apple doesn’t have a separate profit and loss statement for the App Store. Epic Games, as you know, is dragging Apple to court not only over the App Store fee structure but also Apple’s rules that prohibit third-party app stores on the iPhone.
Epic would very much prefer if Apple allowed customers to download and install the Epic Games Store onto their iPhones. Furthermore, Epic is challenging Apple’s App Store rule requiring that all in-app payments use its tried and tested iTunes billing mechanism.
Phil Schiller Runs the App Store
Phil Schiller used to be Apple’s Senior Vice President of Worldwide Marketing for many years before becoming promoted to an Apple Fellow in August 2020. In this role, Schiller leads the App Store and manages the company’s public events, reporting directly to CEO Tim Cook.
Apple used to take 30 percent of all app and subscription sales going through the App Store, with 70 percent going straight to developers. The fee structure was updated in 2020 so that now developers who make less than $1 million in a calendar year are subject to a much lower 15 percent fee rather than 30 percent.
