Apple, Microsoft fight over Office for iOS payments

msoffice - for some reason we don't have an alt tag here

Today, it was wildly reported that Apple and Microsoft were in heated discussions about the 30% cut that the former takes from all App Store sales. According to those reports, Microsoft submitted an updated SkyDrive app to Apple and requested a larger cut of the entire sale of in-app purchases. And while that is completely true – and is why this whole ordeal broke out in the first place – it is the least important thing going on between Cupertino and Redmond right now.

Later in the day, AllThingsD reported that not only were the two companies disagreeing on 30% from SkyDrive in-app purchases, but also on Microsoft’s long-awaited Office for iOS app, which apparently will also contain a number of in-app purchases, too – for which Microsoft is asking Apple for a bigger share of the profits.

Apple, of course, rejected.

Apple, strangely, is the only company involved in this to have commented on the issue at the time of this writing.

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…

In other words, Apple isn’t budging since it – of all companies – wants to be completely fair to developers of all sizes.

On the one hand, Apple has a point: once special exceptions are made for any developer, the rest are sure to follow suit and ask for their own specific payment guidelines based on merit and size. Apple, however large it may be, wouldn’t be able to keep up with the constant requests for the special treatment that its once arch-rival Microsoft was able to receive. Plus, there are millions of iOS users; Microsoft would make a lot of money already – even with the 30% cut that Apple takes for maintaining the App Store.

On the other hand, Microsoft has a good point, too. 30% of millions of dollars worth of sales is a lot of money – yet 20% (or whatever Microsoft is asking for) is, too. Office for iOS is sure to be a hit among many iOS users who use their devices for work on a daily basis. I can’t imagine Microsoft charging an exorbitant amount of money for the suite through the App Store, so it’s going to need all the money it can take to make sure users of the apps get the latest updates and bug fixes. After all, Office is still a professional suite of software, even if customers start using it on their tablets.

At the end of the day, consumers aren’t going to care who wins the conversations. Apple can certainly afford to eat a bit of cash to finally make Office for iOS available to its user base – but so can Microsoft.

Who do you want to prevail? Does it even matter to you? Or are you really stoked to finally write up Word documents and whip up beautiful PowerPoints on your 9.7- or 7.9-inch iPads?

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Calob Horton

Calob Horton is an associate editor at Pocketables. He loves all technology, no matter which company it comes from. This unbiased view of the tech world allows him to choose the products that best fit his personal needs and tastes: a Microsoft Surface Pro, a Samsung Galaxy Note 3, and a third-gen iPad.Google+ | Twitter | More posts by Calob | Subscribe to Calob's posts

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5 thoughts on “Apple, Microsoft fight over Office for iOS payments

  • Avatar of William Devereux

    The fact that Apple mandates that it gets a cut of all subscription revenue is, quite frankly, insane. I understand wanting a cut of app sales, since they’re hosting, maintaining, and curating the app store. But a subscription requires absolutely no effort or cost on Apple’s part. If the company want to give developers the option of going through the store for a 30% cut, that’s understandable. But blocking apps because a subscription doesn’t run through Apple – in perpetuity, I might add – is just greedy.

    • Avatar of Calob Horton

      I think the “justification” in Apple’s eyes is this: since in-app purchases (including subscriptions) are run through Apple’s servers and one’s Apple ID, Apple needs to be paid for the “work” it had to do for one to get that subscription. Heck, I had to go to the app store to stop digital magazine subscriptions.

      Is it ridiculous? Of course! But it’s Apple. :P

      • Avatar of William Devereux

        See, even that is understandable. The two parts that aren’t are that Apple can continue to collect 30% even after customers stop using the app and, more importantly, that these rules apply even when in-app purchases aren’t used.

        Microsoft offered to remove all references and options related to SkyDrive subscription services from the app, which means users would be required to use the website to pay for additional storage. This would have allowed them to bypass Apple’s in-app subscriptions. But nope,
        Apple wasn’t satisfied.

        In fact, Apple has even begun to block third-party apps that use SkyDrive APIs! *sigh*

  • Avatar of Andreas Ødegård

    Difficult case. On the one hand, Microsoft certainly shouldn’t get special treatment. On the other hand, lack of proper Office is a very common complain with the iPad, so Apple can’t really afford saying no either. Then again, Microsoft wouldn’t be making the app to begin with if it didn’t get something out of it.

  • Avatar of gyffes

    I’ve been working off iPod & iPhone for several years now (though hardly exclusively those two), and have yet to NEED Office on either device. I’ve a plethora of text/writing apps and while I can’t quite settle on any, most do what I require considering I’m working on a computer that fits in my pocket.

    If Office is priced akin to Apple’s offerings (Pages, etc), I doubt I’ll pick it up.


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