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Microsoft wants Apple to take a smaller cut on in-app sales of Office 365 subscriptions

Posted: , by Alan F.

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Microsoft wants Apple to take a smaller cut on in-app sales of Office 365 subscriptions
Microsoft and Apple are having a little disagreement related to the rumored Microsoft Office for iOS, an application that seemingly is on its way. First, Apple has decided to deny Microsoft the opportunity to update its cloud based storage system, SkyDrive for iOS. The Redmond based software giant has already updated its Android application, but Apple has refused to accept it's rival's request to update the iOS flavored app because of a disagreement between the two on whether or not Apple deserves the 30% cut it receives on in-app purchases.

Apple gets 30% of in-app revenue

Apple gets 30% of in-app revenue

According to those with inside knowledge of the bickering between the two companies, it is not the 30% of the SkyDrive commissions for larger storage space that Microsoft and Apple are fighting over. Apparently, the fight revolves around the 30% of Office 365 subscription fees that Apple is fighting for. With Microsoft Office for iOS expected to launch early next year, the app is only going to allow users to read documents. Those who want to be able to edit documents using the Office for iOS app will have to subscribe to Office 365 and Microsoft apparently expects a discount on the 30% cut that Apple normally asks for. Microsoft isn't in favor of the 70/30 revenue split and Apple won't budge.

Microsoft expects Apple to give it a discount for the privilege of letting Apple iPhone users use Office on its smartphone. Anyone who knows Apple can already figure out the Cupertino based firm's position on this. Apple has made an official statement on its feelings about revenue sharing on apps and if Microsoft responds, we will let you know.

"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."-Tom Neumayr, Apple spokesman

source: AllThingsD

34 Comments
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posted on 11 Dec 2012, 17:58 3

1. Droid_X_Doug (Posts: 5783; Member since: 22 Dec 2010)


iWonder if Apple is trying to make iTunes do more than break even? Getting iGreedy, Apple, eh?

posted on 11 Dec 2012, 18:58 2

11. htc_prep (Posts: 303; Member since: 09 Oct 2009)


The question is. Which the article doesnt state Is, is Apple's standard recovery fee from all developers 30% or is it this "special'' rate because it is Microsoft?

posted on 11 Dec 2012, 19:21 1

17. Hemlocke (unregistered)


The standard rate for all developers on iOS is 30%. Apple is high, but their store, their rules.

posted on 11 Dec 2012, 23:57

29. anywherehome (Posts: 971; Member since: 13 Dec 2011)


I whish Apple all google apps are paid ;)

posted on 11 Dec 2012, 19:06 2

15. networkdood (Posts: 6267; Member since: 31 Mar 2010)


I am sure that APPLE is way beyond break even with the iTunes. What I hate is when I purchase a movie that comes with a digital copy it is usually only for itunes. That is changing now that UltraViolet is becoming more prevalent.

posted on 11 Dec 2012, 19:14 1

16. Droid_X_Doug (Posts: 5783; Member since: 22 Dec 2010)


The last article I saw (back around Sept/Oct) said they were breaking even and just wanting iTunes to drive iToy revenues.

posted on 11 Dec 2012, 21:21

22. lyndon420 (Posts: 1739; Member since: 11 Jul 2012)


That raises some interesting questions. How much does it cost apple to run the itunes servers/service and what are they pulling in for revenue with it?

posted on 11 Dec 2012, 22:31

25. Droid_X_Doug (Posts: 5783; Member since: 22 Dec 2010)


In round numbers (per the article) $1 Billion/year in expense offset by $1 Billion/year in revenue. There is slightly more revenue than expense, but was on the order of a few million $.

posted on 11 Dec 2012, 23:12

27. MeoCao (unregistered)


$1B a year expense for AppStore? ROFL

What do you think they spend the money on? I remember Google used to earn some $200 M from the Store and still made a small profit.

posted on 11 Dec 2012, 23:55

28. Droid_X_Doug (Posts: 5783; Member since: 22 Dec 2010)


"What do you think they spend the money on?"

Data center fees for the iTunes ecosystem. Headcount for the staff that operate the iTunes ecosystem, do the app reviews & approval process, and, and, and. iTunes has a pretty widespread footprint, and the footprint costs $. The original concept for iTunes was for it to drive sales of iToys and if it broke even, that was great.

It seems that Apple is now wanting iTunes to contribute to the bottom line by doing more than drive sales of iToys. Might be a case of killing the goose that lays golden eggs....

posted on 12 Dec 2012, 02:52

31. MeoCao (unregistered)


1B revenues equal $300 M gross profits (30%). I think they at least have $200 M net profits.

posted on 11 Dec 2012, 20:14 1

20. MeoCao (unregistered)


Office 365 on other platforms than WP is simply to keep Office relevant and it should not deserve special treatment.

But I do think 30% fee is to high and it should be 10% only for all platforms iOS, Android and WP, after all developers do not earn much at the moment.

posted on 11 Dec 2012, 18:01 2

2. xtroid2k (Posts: 366; Member since: 11 Jan 2010)


Well this is a shocker! I do hope they can come to terms so apple customers can benefit from a real office suite.

posted on 11 Dec 2012, 18:13 2

4. Droid_X_Doug (Posts: 5783; Member since: 22 Dec 2010)


Why would Apple want to take a lesser cut? Once you check into the Hotel (iTunes), you can never leave....

posted on 11 Dec 2012, 18:50 1

10. dorianb (Posts: 389; Member since: 24 Oct 2012)


Ha. you win the interweb for the day

posted on 11 Dec 2012, 18:10 2

3. EspHack (Posts: 70; Member since: 04 Sep 2012)


lol apple should think it twice, what happens is they have nothing to offer for the WP store and yet they are giving troubles to ms for helping them at keeping some guys using iphone instead of switching to WP in favor of office support

posted on 11 Dec 2012, 18:17 14

5. amiaq (Posts: 453; Member since: 30 Jun 2012)


iHate Apple even more nowadays.

posted on 11 Dec 2012, 18:36 2

8. darkkjedii (Posts: 11382; Member since: 05 Feb 2011)


Since u only got one thumbs up. I'll make it to, just so u can feel better

posted on 11 Dec 2012, 19:33 2

19. TROLL (banned) (Posts: 4851; Member since: 13 Apr 2012)


Hate isn't the word, more like war, like Steve blwjb said he wants Andriod dead, but look what happend, no he's dead, rotflmfao'

posted on 11 Dec 2012, 22:17 1

24. bucky (Posts: 1432; Member since: 30 Sep 2009)


You take this stuff a little too seriously.

posted on 11 Dec 2012, 18:32 8

6. pongkie (Posts: 502; Member since: 20 Aug 2011)


forget apple put more on android and windows

posted on 11 Dec 2012, 18:33 3

7. lyndon420 (Posts: 1739; Member since: 11 Jul 2012)


Maybe ms needs to rethink their dealings with the fruit company. Stop developing apps for a competitor's platform, or keep the free one on there with a message like "Want the full version? Buy a Windows Phone and get a free 2 year subscription to Office" etc. Unless its web-based keep the good apps exclusive to your own OS.

I love what Google offers, so I prefer to support their platform.

posted on 11 Dec 2012, 18:44 5

9. windroid (unregistered)


Somehow tired of Apple imposing its rules to the rest of the world...

posted on 11 Dec 2012, 19:00 5

12. redmd (Posts: 893; Member since: 26 Oct 2011)


just buy android and your fine if productivity is what you're looking for.

posted on 11 Dec 2012, 19:04

14. networkdood (Posts: 6267; Member since: 31 Mar 2010)


What I have works great and it was free on Amazon one time (at band camp), and then really cheap on Play store during a sale.

posted on 11 Dec 2012, 19:03 2

13. networkdood (Posts: 6267; Member since: 31 Mar 2010)


700k apps - of which 200k have never been downloaded... and many of the remaining 500k are tablet only...

posted on 11 Dec 2012, 23:59 1

30. anywherehome (Posts: 971; Member since: 13 Dec 2011)


600K max once downloaded......by its developer

posted on 11 Dec 2012, 19:29 6

18. papss (unregistered)


Apple is complete garbage...as Im tying on my iPad... I'm soon to sell it for a surface.. I just can't stand them as a whole

posted on 11 Dec 2012, 22:01 1

23. therealestmc (Posts: 129; Member since: 23 Jul 2012)


Why would you sell the iPad and get a Surface with a crappy display? Nexus 10 is better.

posted on 11 Dec 2012, 20:37 1

21. hanapupu (Posts: 14; Member since: 03 Dec 2012)


We’ve paid out over 6.5 billion dollars to our developer community who have created over 700,000 apps."-Tom Neumayr, Apple spokesman

How much have they "steal" from "sitting around percentage"

posted on 11 Dec 2012, 22:34

26. Droid_X_Doug (Posts: 5783; Member since: 22 Dec 2010)


I think the $6.5 B represents total payout from day 1 to when the statement was made.

posted on 12 Dec 2012, 07:11

32. papss (unregistered)


There are a few reasons.. Firstly I have an xbox360, WP8 second reason is the durability. Nexus has everything but it looks cheap and less durably (typical with Sammy products). Ecosystem is important to me

posted on 12 Dec 2012, 13:44

33. Stuntman (Posts: 720; Member since: 01 Aug 2011)


This will be an interesting dispute. How would Apple feel if their iOS users cannot edit MS Office docs with the official MS Office app? How would MS feel if they cannot sell MS Office to iOS user. What will iOS users do? Will users be satisfied with third party Office apps on iOS?

posted on 12 Dec 2012, 14:17

34. speckledapple (Posts: 879; Member since: 29 Sep 2011)


It looks like Apple users might be again at a disadvantage if Microsoft decides against Office for iOS over some revenue sharing.

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