Today there has been a report that Microsoft and Apple are currently at a stalemate with a supposed app update to SkyDrive on iOS. Apple has allegedly blocked the update as they are now demanding a 30% cut of revenue from SkyDrive subscriptions.
It is not possible to purchase more storage from within the SkyDrive app, if the report from TheNextWeb is true this could mean bad news for iOS versions of the Office Apps.
The report then goes on to say that Microsoft cannot budge on a 30% cut as it would mean an automatic and continued revenue stream for Apple even if the user doesn’t have an iOS device. It’s perpetual regardless of what device they happen to be using. The inner workings of these agreements are of course open to speculation and we’ll be remiss not to point out that this one is firmly chalked up to being “rumour” at the moment.
So is Apple really worried about a cut of Microsoft’s SkyDrive Subscriptions? That could be the case and may signal a more concerted effort by the Apple to take a little more from the developers who inhabit their eco system. After all if everyone starts providing a free app but actually has a subscription model behind it, how will Apple make any money? Companies like Amazon have rejected the notion of a 30% tax on in-app purchases for this very reason. These apps are now for windows shopping only or consuming content bought through the web site. How does this enhance the experience of users?
Yep, SkyDrive is free here, here & here
With the obvious reasons parked for the moment, this alleged spat over SkyDrive is more likely to be a pre-cursor to a revenue grab from an iOS version of Office. This week has seen renewed signs of life from an iOS version of the suite. Office for Android and iOS is widely assumed to be delivered by way of a free app that requires an Office 365 Subscription to use it - the same way that SkyDrive works currently. The reasons for making Office available for devices like the iPad are clear and it could be a win for Apple and MS equally but reason has a way of taking a back seat to these types of issues.
If there is any truth to the report that Microsoft and Apple are in deadlock over SkyDrive then it’s almost certainly just a side show for Office. Unlike SkyDrive which comes with 7GB of free space, Office will likely need that subscription to work at all. The potential market for Microsoft for Office apps on Android and iOS is huge; the most widely known productivity package has tons of revenue potential on mobile. It will also be a great way to introduce consumers and business to a new way of using office, through a subscription.
Will Microsoft cave into Apple and give up a whopping 30% of revenue for the chance to have an app on the platform? If the company wants to play in Apple's ecosystem then they have to play by their rules whatever they might be. The two companies have a long and close working relationship, we’re sure that these things will settle down eventually.
Would Apple rather see no Office be available on their mobile devices than never see any money from the app subscription? Microsoft will need to address this SkyDrive issue now. If they cannot, then perhaps some demos of Office 365 apps and services on the iPad might be the gentle push that’s needed to grease the wheels of these talks?
Xbox Music - Set to arrived on iOS but at what cost to Microsoft?
The iOS subscription issue doesn’t just end at SkyDrive and Office; there is also the looming availability of an Xbox Music App for the platform. Perhaps that app will even allow music to be purchased from within? Until we hear from either Microsoft or Apple on this subject (which is highly unlikely) we’re going to take the report with a pinch of salt but it offers a tantalising glimpse of the potential issues at stake for Microsoft’s apps and services.
If Apple do dig their heels in then it’s also a great chance for Microsoft to promote Office on their own mobile platform, Windows Phone. By highlighting an iOS app that works but is being held back by Apple whilst showing off the free offering built into Windows Phone, this could be a PR coup.