Apple recently rejected an update to Microsoft’s SkyDrive app for the iOS platform following a disagreement over whether it is owed the 30% cut of in-app purchases it typically demands. SkyDrive is turning out to be just one small part of the larger argument between the two companies as Office for iOS is being brought up as well.
As of right now, sources familiar with the ongoing negotiations between Apple and Microsoft are stating that the two companies are at a disagreement over the 30% commission Apple asks of storage upgrade sales made not only on SkyDrive but over applying the same commission to Office 365 subscriptions sold through Microsoft Office for iOS, which is expected to launch sometime next year. As one can imagine, Office has been a cash cow for Microsoft for quite some time and extending the services to the iOS platform will undoubtedly fatten the revenue income further. It’ll also bring significant benefits to Apple’s mobile platform, ones for which Microsoft feels it is owed a discount on the 30% cut that Apple would otherwise command on Office 365 subscriptions sold to is iOS users through it. Just to clarify, the apps are just part of a subscription that includes desktop access as well.
As a result of its point of view, Microsoft is pushing Apple to adjust the 70/30 revenue split in its developer license agreement. As predicted, Apple refused to comply to the suggested exception. It isn’t clearly exactly what sort of concession Microsoft is seeking but regardless of what it is, Apple’s evidently not willing to consider it. Apple stands firm in its position stating that if a customer comes through its gateway, it feels it is deserved the commission outlined in 11.12 of its developer license, one which states a 70/30 revenue split between the developer and Apple. The Cupertino California company declined to comment on any discussions it is having with Microsoft over Office for iOS, but it did provide a statement on its revenue-share rules, while stating the following:
Apple provides customers and developers the largest selection and safest way to discover apps with our curated App Store. We’ve designed our rules to be fair and consistent for every developer — free apps and services are distributed for free, paid apps and services provide a revenue share to Apple. We’ve paid out over 6.5 billion dollars to our developer community who have created over 700,000 apps.
Who do you feel has the more compelling argument here? We’ll have to wait and see what is or what isn’t agreed upon all while also waiting for the release of Office for iOS.