Forget SkyDrive, Apple And Microsoft Battling Over Subscriptions In Upcoming Office For iOS

Forget SkyDrive, Apple And Microsoft Battling Over Subscriptions In Upcoming Office For iOS

Earlier today, it was revealed that Apple rejected an update to Microsoft’s SkyDrive iOS app in the App Store. The reason was rumored to be because Microsoft didn’t want to share a percentage of subscription revenues from inside the app, and Apple has a blanket policy about all App Store developers sharing a 30% cut.

While the two companies are indeed arguing about Apple’s App Store policies, the issue actually surrounds the upcoming Office for iOS suite that Microsoft plans to launch in early 2013.

According to a report from AllThingsD, Microsoft thinks it shouldn’t have to give Apple 30% of Office 365 subscriptions:

Apple has indeed rejected — not merely delayed — an update to Microsoft’s SkyDrive app for iOS following a disagreement over whether it is owed the 30 percent cut of in-app purchases it typically demands. But the spat over SkyDrive is just one small part of the larger argument between the two companies.

Sources familiar with the ongoing negotiations between Apple and Microsoft tell AllThingsD that the companies are at loggerheads not over the 30 percent commission Apple asks of storage upgrade sales made through SkyDrive, but over applying that same commission to Office 365 subscriptions sold through Microsoft Office for iOS, which is expected to launch sometime next year.

Because you can sign up for an Office 365 subscription on a non-iOS device, Microsoft thinks it should be excluded from Apple’s 30% cut rule. Office for iOS is rumored to heavily focus on Microsoft’s cloud sync service, Office 365, and allow users to sign up for a new subscription in-app. If Apple and Microsoft can’t reach an agreement, Microsoft will probably have to remove the sign up option before Office goes live in the App Store.

  • technochick

    Microsoft are idiots. If the sign up is done off device Apple doesn’t get a cut. Same as wi my Netflix which I had for years before iOS, my Hulu etc.

  • Howard

    Apple needs to rethink it’s strategy. With MS having a usable tablet, large corporations may decide it is easier to use MS tablets instead of the hassle Apple is putting some of these companies through.

  • thegraphicmac

    Sound theory, Howard. However, the part that debunks your theory is simply that USERS don’t want MS products. Period. And corporations of all sizes are finding out the hard way that they either have to allow users to choose Apple/Android products, or those users will just circumvent the security set in place.

    It’s ironic that MS is now crying over what will probably be a $30-$50 fee per user going to Apple when for years they’ve been screwing customers with outrageous fees for their products.

About the author

Alex HeathAlex Heath is a journalist and co-host of The CultCast who lives in Lexington, Kentucky . He has been quoted by the likes of the BBC, KRON 4 News, and books like "ICONIC: A Photographic Tribute to Apple Innovation." If you want to pitch a story, share a tip, or just get in touch, additional contact information is available on his personal site. Twitter always works too.

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