Apple’s App Store commission framework is encountering global difficulties, yet the company has recently established a noteworthy new revenue stream via an agreement with WeChat in China. This collaboration is particularly significant due to the distinctive manner in which Chinese iPhone users acquire apps.
### How Chinese iPhone Users Buy Apps
In China, WeChat has become a vital part of everyday life, acting as a multifunctional platform with more than a billion users. It operates as a secondary operating system for many, enabling users to perform a wide range of tasks—from messaging and bill payments to taxi bookings and food ordering—through various mini-apps integrated within the app. A survey conducted in 2020 indicated that 95% of Chinese iPhone users would rather give up their iPhones than surrender WeChat, highlighting its supremacy.
Nonetheless, a considerable challenge for Apple stems from the reality that purchases made through these mini-apps generally do not yield commissions for the company. Developers frequently guide users to external payment methods, bypassing Apple’s standard commission costs.
### WeChat Deal Gives Apple a 15% Commission
Following prolonged negotiations, Apple has secured a deal with Tencent, the creator of WeChat, to permit Apple to manage payments for purchases made within WeChat’s mini-games and apps. As reported by Bloomberg, this agreement will allow Apple to receive a 15% share of these transactions, a rate that is notably lower than the usual 30% commission charged by the App Store.
This arrangement not only opens a new revenue channel for Apple but also alleviates pressure on Tencent, which runs WeChat at the core of millions of Chinese users’ lives. The financial ramifications of this deal could be considerable, potentially amounting to billions of dollars for Apple.
In conclusion, while Apple confronts regulatory hurdles regarding its App Store commissions in different nations, the WeChat collaboration signifies a strategic maneuver to bolster its earnings in one of the largest smartphone markets globally.
