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Apple and Microsoft reportedly fighting over revenue sharing, SkyDrive app caught in the crossfire

Apple and Microsoft reportedly fighting over revenue sharing, SkyDrive app caught in the crossfire

Apple and Microsoft are reportedly wrestling over Apple’s 30% cut of items sold in the App Store, specifically SkyDrive subscription revenue for the SkyDrive app. The SkyDrive app was intended to not only allow users to view and open their files, but to upgrade their storage though the iOS app. According to the App Store rules, however, Apple's entitled to a 30% cut of any in-app purchases. According to Alex Wilhelm of The Next Web, however, it's gotten even more complicated:

Microsoft has persisted in trying to work out a compromise with Apple, but has thus far failed to come to an agreement. The company offered to remove all subscription options from its application, leaving it a non-revenue generating experience on iOS. The offer was rebuffed.

At issue could be one thing: the SkyDrive app has a “Sign Up” button that takes the user to a web page where they can purchase a subscription. This is against Apple’s policies, and there have been problems with apps doing this before. When Apple first implemented these rules, there was an issue with the Kindle app linking back to Amazon so that people could purchase books outside of Apple’s system. Apple doesn’t have a problem if your content comes from outside of its ecosystem, you just can’t directly link to said content in any fashion, which is what Microsoft is doing with the SkyDrive app.

This is also a issue for developers who integrate with SkyDrive. If their apps link to the SkyDrive sign-up, then their future updates will also be rejected, leaving their users out in the cold.

Apple's policy feels like it was originally designed to stop dishonest developers from abusing Apple's support of free apps by switching all payments to post-purchase up-sells. However, as time goes on its increasingly obvious that larger vendors like Microsoft, Amazon, and others should fall into a different category.

Hopefully for SkyDrive users, Apple and Microsoft figure this out.

Source: The Next Web

Joseph Keller

Joseph Keller is a news reporter for iMore. He's also chilling out and having a sandwich.

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Reader comments

Apple and Microsoft reportedly fighting over revenue sharing, SkyDrive app caught in the crossfire

13 Comments

"Apple's policy feels like it was originally designed to stop dishonest developers... "

Oh my, perhaps that's the way it feels to a naive fan. In reality, it would be bruttaly simple to screen that during the approval process.

Let's be honest for a second, it was designed to maximize profit, to exact a tax in every transaction to finance Apple's ecosystem. Nothing wrong with that, the rules were clear and developers chose to participate, but please, spare me the lame "stop dishonest developers" excuse.

If Apple supports free apps for free, and allows in-app payment, there's nothing to stop even the least savvy app-makers from switching to a free with in-app payment model for virtually every app in the store.

Everything becomes free to try, pay to play, and Apple is shut out.

Apple runs the App Store just above cost; they won't run it at a loss.

So, everything is 30% and there's no end-run around that.

The problem is, the world isn't that black and white, and lots of value-added services don't fit into that model.

I don't agree with this:
"However, as time goes on its increasingly obvious that larger vendors like Microsoft, Amazon, and others should fall into a different category."

Why should they be treated any differently? If anyone can afford to give Apple a cut, it's these big guys...

Apple brought the customer so they want a referral fee, is basically how I see it.

Amazon is so big that I highly doubt Apple brings anyone to them. If someone loads the kindle app on an iPad or iPhone it's not because of anything Apple is doing. It's because of Amazon and their advertising and the services and product they supply. So I don't see where the referral is, and I say this as an iPad owner. Apple sold me an iPad, they didn't bring me to Amazon. If anything, Amazon brought me to Apple since it made a great reader for my Kindle library and unlike the eReaders at the time I could do a lot of other things on it. So in that case, Amazon deserves the referral fee for my iPad purchase since without them I might not be on Apple's app store at all.

I do understand Apple doesn't want a large number of developers to put up the app 'free nudge nudge wink wink say no more' then slap you immediately with the real price which you pay to them direct and Apple gets nothing for running the 'store front'. But I think you can prevent that other ways then getting 30% for purchases you really had nothing to do with, and I think at some point they may need to find a way as these cases keep bringing to the publics attention the 'tax' they are being charged.

Regardless of whether you agree with the reason for the fee... You should be able to agree that there is no reason for Amazon or Microsoft to get special treatment. If they want to offer services in iOS, they have to follow the same rules as everyone else.

This isn't a hard concept to understand. Like Rene said "free" in-app purchases would change the whole dynamic of the store. Microsoft is large...so what. They need to follow the same rules as everyone. Beside Skydrive offers less than Dropbox in features so no skin off my teeth if Redmond wants to play dumb.

This snippet was omitted from the summary, and is *far* more problematic:

"Microsoft does not appear keen to pay Apple the 30% cut, as it lasts in perpetuity, regardless of whether a user continues to use an iOS device or not, as the billing is through their Apple account."

IOW, if Microsoft works out the 30% deal, and a user switches to an Android phone, Microsoft still pays Apple a 30% cut, even if the user no longer uses any Apple products.

I am not exactly a Microsoft fan, but it is not hard to see why this is completely unacceptable to them.

What?! iMore omitted info that would make Apple look unreasonable and Microsoft look reasonable?!?! No WAY!!!

Having actual facts would be taboo. Any blemish on Apple is grounds for termination. You will be lucky if your not banned for showing this burried info. Lil Richie don't much care for your type.

They ban folks around here? They got a first rate little foul mouth in the comments for the last few months, with absolutely nothing intelligent to say, who insults entire classes of people with racism at the least among other insults that when face to face he/she wouldn't dare say out of fear. I haven't seen that character get banned.

It seems an act of Apple's Board of Directors is what it would take to get banned.

That is awesome! MS should announce they are going to do that, but give 6 months notice, and offer a free Windows 8 Phone to anybody who wants to trade their iPhone in because they actually need ActiveSync support.

Hilarious!