What you need to know
- Apple announced its App Store Small Business Program last year.
- Phil Schiller has told the court in the Epic Games trial that work on the program started in 2016.
- He says that the number one reason for the rollout was the pandemic, but that the lawsuit did help him get it done.
Apple fellow Phil Schiller has told the court in the Epic Games trial that work on Apple's App Store Small Business Program began in 2016, and that the primary reason for its rollout last year was the pandemic.
Apple called Schiller to the stand as its first witness on Monday. He spoke about the launch of the iPhone in 2007, and the introduction of the App Store. Speaking about the App Store Small Business Program, Schiller told the court that the original work started in 2016, with the program going into effect at the start of 2021. The program reduces the rate of commission paid to Apple for developers who earn less than $1 million App Store revenue per year. The program has drawn some criticism for its cut-off, developers who go over this liable to pay the full 30% rate the following year. Some have noted Google's own version of the change is much better because it reduces the rate on the first $1 million developers earn.
As Adi Robertson noted on Twitter, the distinction of this date is key, as it was "was easy to argue that it had only dropped its prices under legal pressure." Evidence presented in court seen by iMore notes a further email chain from June 2018 in which Apple execs including Phil Schiller and Eddy Cue discussed ideas to help small and new developers such as a chunk of starting Search Ads credit, as well as discussion of a reduction in commission or substituting some commission for search ads. Schiller wrote:
There have been some discussions through the years about how to create a great program for indy developers to get started on the App Store.>>>> >>>> Here is an idea called "Jump Start" = Small, independent developers get to use up to 50% of their first year revenue (from app purchases, IAP, and Subscription revenue) toward Search Ads Basic up until some reasonable cap. They would have to be real first-time developers (I don't know how we vet that) and maybe also small developers with a brand new title for the first year (to give an opportunity to those who have already been on the store). The cool thing is that new, small developers can use their revenue to accelerate the growth of their new app with guaranteed downloads via search.
Asked about what spurred on the launch of the program, Schiller stated that the number one reason for him was the pandemic, describing it as a "personal motivation for getting it done". When pressed about the Epic lawsuit, Schiller replied "I would say it helped me get it done. I would absolutely agree it helped to get the program done" before adding "I wouldn't say it's why we did it, but it helped".
In his testimony yesterday Schiller also revealed Apple spends $50 million on its WWDC conferences, and explained Apple's stance on xCloud and why it's not on the App Store.