Apple and Microsoft at Odds over Revenue

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Posted 5 years ago

It will come as no surprise that Apple is currently in dispute with a rival, but for this time at least, it is Microsoft, and not Samsung, or HTC that are the focus of Cupertino anger.

According to a report by The Next Web, Apple is angry Microsoft over revenue related to the iOS SkyDrive app and is keeping an update out of the App Store as a result.

This all comes from Microsoft introducing the ability to purchase more cloud storage in the SkyDrive app. Nothing untoward there, you may think, but when money becomes involved, things become a little more animated. You see, Apple has a policy in their App Store that dictates that they will take 30 percent of all app sales, as well as 30 percent of the revenue generated from in app sales. As TechRadar points out, this means Apple would continue to bring in 30 percent of SkyDrive subscription fees, even if a user no longer accesses SkyDrive on an iOS device. Of course, this sort of profit sharing arrangement does not sound very appealing to Microsoft and they are not having it.

Because of Microsoft’s disagreement, Apple has decided to block the latest upgrade until some kind of deal is agreed upon. According to The Next Web story, Microsoft has been trying to come to an arrangement with Apple, even offering to remove all subscription options from the SkyDrive app, thus making it unable to generate revenue – Apple turned down this offer, leaving users without an upgrade needed to fix a bug that causes the app to crash.

Only part of the story

While it is the SkyDrive story that has grabbed the headlines over the past 24 hours, it seems as though it might only be a side issue to the real problems between Apple and Microsoft. AllThingsD has reported on what may well be the real controversy: Office for iOS.

“Sources familiar with 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,” said the AllThingsD story.

Office 365 will be the app that makes all other Microsoft apps on iOS useful and the company does not want 30 percent of subscription revenue going to Apple, especially when Cupertino will still be raking it in even if a user leaves iOS and uses their Office 365 elsewhere. Microsoft are said to be trying to persuade Apple to take less than 30 percent, but Apple are thus far “not willing to negotiate on this.” This may well be the reason that Microsoft has let the SkyDrive issue go public, in hope that it can help in negotiations. However, if Apple does budge, they could well open the floodgates to developers looking to renegotiate their own revenue split, and Tim Cook and co. will not like that.

– Anthony Carter

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