Apple and Microsoft Reportedly Facing Off Over SkyDrive In-App Subscription Revenues

[rjohnstone]

Originally Posted by mw360

Check your own reading comprehension. The article does not say they removed the feature.

Oh really?

Originally Posted by MacRumors

The report claims that Microsoft has offered to remove the subscription options from the SkyDrive app, but Apple has still declined to allow updates to the app. It is unclear why Apple would have refused such an offer, as many similar apps such as Dropbox operate under this model.

[Judas1]

I don't get how apple can keep continuing their con game. Sure they make a great product. That's why they can charge so much and sell so many products. But why do they get to have exclusive access to iOS users. They don't own them. Apps in the App Store make their platform better, so that people would continue to buy their products. The App Store does zero advertisement for big names. People know of the big names from other places. Apple is just hosting, and by hosting, they enjoy the benefit of a better ecosystem. Why do they deserve money for subscriptions that somebody else is doing all the hard work to make it happen?

Originally Posted by Kaibelf

And you think that hosting space, update pushing, and bandwidth is free? Feel free to host MS's apps on your own equipment for free then.

[Renzatic]

Originally Posted by BaldiMac

Again, we did the exact same thing. We sold third party services. We did nothing but the transaction. We received a commission. Often more than 30%.

Commissions for referrals are a completely normal business transaction. Pretending its not in order to generate faux outrage is either myopic or disingenuous.

This situation is more like Apple forcing themselves to be the middleman to rake in cash, rather than being a simple store offering a service and expecting compensation. Once you grab the file off the app store, Apple has nothing to do with the hosting or the administration of Skydrive. They're just taking a cut because people have no other choice but to use Apple as a payment processor if they decide to go with an IAP setup.

...which MS has decided to forego for the Dropbox link-to-the-website route, but Apple is being difficult here, too.

Like I said in a previous thread, it's like Samsung charging HBO 30% of their subscription fees simply because you're watching the channel on their TV.

If Apple wants their cut for hosting the file, they shouldn't offer free apps. They have no right to charge for something they don't directly control or host themselves.

[gotluck]

Originally Posted by flottenheimer

Well, rules are rules.
Fair or not — thankfully they apply to all.

— — —

As far as I know Googles app-store cuts match those of Apples (30%), while these are the rules on Microsofts own store:

The Windows Store will be the only way Windows 8 users can purchase the new Metro Style apps, and Microsoft will attempt to attract developers by taking a smaller cut than Apple and Google on successful apps. Apps will be priced from $1.49 to $999.99, although free and trial apps will also be available.

Apple has relied on a huge user base to justify its 30% commission on apps sold through its store, as well as taking a slice of in-app sales. Microsoft also plans to take an initial 30%, but will reduce its commission on strong selling apps.

“The revenue share base is 70%, but when an app achieves $25k in revenue — aggregated across all sales in every market — that app moves to 80% revenue share for the lifetime of that app,” said Ted Dworkin, partner program manager for the Store in a Microsoft blog.
Developers have the freedom to use Microsoft’s transaction service or use their own and Microsoft will take 0% of in-app purchase revenue
“So, once an app establishes a bit of success, we increase the revenue share to 80% to reflect and reward that success,” he said.

... Microsoft is also hoping to attract partners by shunning the in-app payment commissions that have angered companies using Apple's platform.
Companies such as publishers that want to charge for content through their apps will be able to use either their own payment processes or Microsoft's in-house option, the company said. “Developers have the freedom to use Microsoft’s transaction service or use their own and Microsoft will take 0% of in-app purchase revenue,” the company said.

Source: PC Pro - http://bit.ly/TNBNrl

Not sure about Windows Store, but any Android device can sideload apps thus avoiding all these shenanigans. The vendor can just host the app on their own website and users can download it from there, avoiding Google Play all together.

[HenryDJP]

Originally Posted by ChazUK

1. Microsoft have to pay Apple a yearly subscription as a developer.
2. Microsoft have to buy and use Apple dasktop level hardware to develop applications on iOS.
3. Consumers have to pay Apple hundreds of Dollars/Euros/Pounds/Yen/Whatever to have access to these applications

Don't you think third parties and consumers pony up enough money already? People are acting like it's a free ride for consumers and developers to use Apple's services.

EDIT: And that armchair CEO thing? Rather than have a discussion, it's better to try and belittle those with a differing opinion to your own?

Nice!

The annual subscription and required software is hardly a boat load of cash against the revenue acquired from in-app purchases. Now you're worried that poor MS is paying too much? OKAY.

[ctdonath]

Originally Posted by Stella

So Apple are taking 30% commission for being a payment processor?!!

Yes.

Because their position to be the payment processor has a substantial effect on improving sales. A lot of people wouldn't be paying for SkyDrive space if not for the iOS app and in-app payments.

And of course the discussion goes nowhere, because people have differing opinions based on different axioms, and because uniform application of a simple sales rule results in some scenarios eliciting consternation.
We're supposed to celebrate diversity, right?

[gotluck]

Originally Posted by Nightarchaon

an addware riddled mess of crappy malware disguised as a fart apps ? ..oh wait...

I'm sure you like the concept of Big Brother watching over you too?

[linuxcooldude]

Don't see what the problem is about. Microsoft is not stupid when it came out with the in app payment option. They knew it was not allowed.

Putting out a free app, then having an in app purchase without giving Apple a cut is bad business. It took Apple years to build its iTunes store infrastructure to what it is today. Now everyone wants to cash in on the popularity of iOS without paying for anything seems a far fetched notion to me.

[mw360]

Originally Posted by rjohnstone

Oh really?

The report claims that Microsoft has offered to remove the subscription options from the SkyDrive app, but Apple has still declined to allow updates to the app. It is unclear why Apple would have refused such an offer, as many similar apps such as Dropbox operate under this model.

See it? Offered. The feature has not been removed. That's why the app has not been approved.

MS are trying to persuade Apple to let the App through because it contains a serious bug fix. They're promising to remove the subs button in the next submission, but Apple aren't having it. My guess of course, but it fits all the claims in the story, and makes both sides appear perfectly reasonable.

[viacavour]

Don't fall for it guys !

It's bait and switch. And we may not have the full info.

Microsoft wants to offer Office for iOS first to attract users. Then offer exclusive features on Windows Phone, or gimp the iOS one like Google Maps, to lure these people away.

Apple is using this crucial initial period to make sure MS commit to make the Office for iOS version the best -- by forcing MS to continue to pay 30% to Apple anyway.

What happens if users switch because of other reasons of no MS's fault ? Get these users to terminate/suspend their Apple account by transferring the 30% discount partially to them.

In this way, the relations will be clearer and MS have more difficulty in shortchanging iOS users in the long run.

[Renzatic]

Originally Posted by ctdonath

Yes.

Because their position to be the payment processor has a substantial effect on improving sales. A lot of people wouldn't be paying for SkyDrive space if not for the iOS app and in-app payments.

And of course the discussion goes nowhere, because people have differing opinions based on different axioms, and because uniform application of a simple sales rule results in some scenarios eliciting consternation.
We're supposed to celebrate diversity, right?

If it were so simple. MS doesn't want to use Apple's IAP setup to get subscription fees. Apple isn't allowing it. Basically, if you want to offer a service on Apple's platform, you have to pay them for everything.

Yeah, I know. I know. It's Apple's device, they can do what they want with it. I wonder if you'd all be so kind if MS charged Netflix, Google, Steam, Amazon whatever a 30% charge for the "right" to use Windows for their own services.

[Krevnik]

Originally Posted by Dr McKay

Say you work for Gamestop and someone bought a copy of World of Warcraft, should Blizzard have to pay 30% of each monthly subscription charge to Gamestop?

If you buy your game time via GameStop, they do get a cut of the subscription. This analogy is kinda flawed since it actually is similar to what Apple is saying. They are asking devs to make sure someone can buy via Apple (GameStop) like they can otherwise, at the same price, and get a cut when it is sold through Apple (GameStop).

http://m.gamestop.com/Catalog/Product/40922

[Judas1]

Originally Posted by BaldiMac

Should they have to? No. It's up to them. If Gamestop wants to sell subscriptions for the service and Blizzard wants to pay them a commission, they make a deal.

If Blizzard wants to give WoW away free and only charge a subscription, should Gamestop be required to stock it?

But see, that's called an agreement between two parties. We don't have such a thing here. Microsoft does not want apple to sell subscription for them. They want to sell it themselves. Store fronts help sell a product, so that why they deserve a commission. Apple is not helping sell skydrive. They deserve no commission. It's a con game that everybody has to use their App Store. And then, even if they dont do any service, they get to charge a commission. Hosting apps in the App Store is something that benefits their iOS ecosystem. They can charge a flat fee for hosting, a fee based on file size, or a fee based on the price of the app, or charge nothing. They can't charge for services they don't contribute to.

[ds2000]

30% is excessive. I've purchased iBooks but I am starting to think moving to kindle is the better option if I ever want to ditch my iPad......

Things like this from Apple where its ultimately the customer that suffers are a put off...

[BaldiMac]

Originally Posted by Renzatic

This situation is more like Apple forcing themselves to be the middleman to rake in cash, rather than being a simple store offering a service and expecting compensation. Once you grab the file off the app store, Apple has nothing to do with the hosting or the administration of Skydrive. They're just taking a cut because people have no other choice but to use Apple as a payment processor if they decide to go with an IAP setup.

...which MS has decided to forego for the Dropbox link-to-the-website route, but Apple is being difficult here, too.

If Apple wants their cut for hosting the file, they shouldn't offer free apps. They have no right to charge for something they don't directly control or host themselves.

Again, Apple isn't charging for hosting the file outside of the developer fee. What they are charging for is a referral fee for offering Microsoft's service through the App Store. Microsoft can either agree to this fee or not.

My store had a lot of customers that would be interested in certain third-party services. I charged the service providers for access to my customers. I conducted the transaction and took a referral fee.

If one of those service provider wanted to put a free product in my store that brought customers their way without paying me the commission, I would refuse to carry the product.

Like I said in a previous thread, it's like Samsung charging HBO 30% of their subscription fees simply because you're watching the channel on their TV.

If Samsung thinks they can get HBO to pay them 30% for access to a Samsung TV, more power to them. I don't think Samsung has that kind of leverage at this point.

[drewc1138]

Here's the thing, even considering the fact that the report says that Microsoft has "offered" to remove the subscription options from the app, we're hearing one biased side of the story. They could have done that, but still left in a link that directs you to the site where you sign up, which is against Apple's Terms & Conditions.

Whether you agree with Apple's stance on subscriptions, here's the deal: when a developer signs up, they agree to the T&C. If they think the game's unfair, they don't have to play. Apple says "Here, you can tap into our massive user base, but you have to follow these rules. If you don't want to follow the rules, then that's your choice, but we won't allow your app in our store."

It's very simple. There are workarounds in place, though they're not necessarily elegant.

The market should decide here, and it has. Until developers start jumping ship and Apple starts losing revenue, it'll stay like it is.

[HenryDJP]

Originally Posted by linuxcooldude

Don't see what the problem is about. Microsoft is not stupid when it came out with the in app payment option. They knew it was not allowed.

Putting out a free app, then having an in app purchase without giving Apple a cut is bad business. It took Apple years to build its iTunes store infrastructure to what it is today. Now everyone wants to cash in on the popularity of iOS without paying for anything seems a far fetched notion to me.

Exactly. Also what some people don't know is by Apple taking a 30% cut it takes the responsibility off the vendor and I know all about that. I bought a few apps that had glitches and I bought an app that was advertised for a specific price and when I pressed the purchase button the price went up but the vendor didn't put an expiration date for the sale price.

I contacted the vendors for each situation and they told me point blank, "Sorry but since it's an iTunes purchase you will need to take it up with Apple". So the vendor can have a glitchy application but they won't deal with their own customers? Yeah, that's why Apple takes a cut. It's not just to be greedy, but it's to handle the POS processing and to absorb the customer issues while the developer just sits back and rakes in all the 70% revenue.

[Nightarchaon]

Originally Posted by gotluck

I'm sure you like the concept of Big Brother watching over you too?

rather big brother than a Chinese guy nicking my card details,

[BaldiMac]

Originally Posted by Judas1

But see, that's called an agreement between two parties. We don't have such a thing here.

That's just wrong. Of course there is an agreement between the two parties.

[mw360]

Originally Posted by ds2000

30% is excessive. I've purchased iBooks but I am starting to think moving to kindle is the better option if I ever want to ditch my iPad......

Things like this from Apple where its ultimately the customer that suffers are a put off...

You know Amazon take 30%? Last I heard, sometimes up to 70% on eBooks...

[Renzatic]

Originally Posted by Krevnik

If you buy your game time via GameStop, they do get a cut of the subscription. This analogy is kinda flawed since it actually is similar to what Apple is saying. They are asking devs to make sure someone can buy via Apple (GameStop) like they can otherwise, at the same price, and get a cut when it is sold through Apple (GameStop).

http://m.gamestop.com/Catalog/Product/40922

That's a subscription card. If someone buys the game, and signs up for a WoW subscription through their credit card, Gamestop gets no cut whatsoever.

Why should they? They're not hosting the WoW servers. They're not even processing the payments by that point.

[gotluck]

Originally Posted by Nightarchaon

rather big brother than a Chinese guy nicking my card details,

Meh, give me freedom - I just don't fit in around here.

[Renzatic]

Originally Posted by mw360

You know Amazon take 30%? Last I heard, sometimes up to 70% on eBooks...

That's ridiculous, but at least semi justifiable. They're hosting and advertising the e-books after all. Much the same way Apple hosts and advertises apps, and thus deserve a cut of the payment there.

But this is for subscription services, which Apple would normally have nothing to do with if they didn't strong-arm their way into the middle of it all. They're taking a cut for something they don't directly deserve.

[BaldiMac]

Originally Posted by Renzatic

That's a subscription card. If someone buys the game, and signs up for a WoW subscription through their credit card, Gamestop gets no cut whatsoever.

Why should they? They're not hosting the WoW servers. They're not even processing the payments by that point.

That's pretty much what Apple is doing.

[Bezetos]

Originally Posted by bbeagle

MacRumors is increasingly turning into FOX news. What a misleading article with no facts, just assumptions, and relentless Apple bashing.

Sorry sir but Apple fans' fanatical comments sound more like Fox News to me...

For those who will respond with 'What's misleading?' Everything. Has Microsoft actually submitted an app update? We don't know.

*beep* We do.

"As a result, Apple has refused to approve any updates to the SkyDrive app. (...) but Apple has still declined to allow updates to the app."

Is Apple not allowing an app update to be approved? We don't know.

*beep* We do. See above.

Is Microsoft upset with Apple? We don't know. Is Apple upset with Microsoft? We don't know.

You've only just mentioned this. Nobody's talking about being upset.