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

[StyxMaker]

So give me the checkbox and keep using the store yourself.

Giving people the option doesn't mean everyone has to take it.

Don't restrict my freedom because someone else can't handle it.

You do have freedom, you have the freedom to not buy iOS devices.

 

[StyxMaker]

Because you helped sell the products, and it was a mutual beneficial arrangement. Some times, for big companies, their name brand is what sells the products. Therefore apple doesn't deserve a cut.

What does 'deserve' have to do with it?

 

[everything-i]

I think you hit the nail on the head. On top of it, people are also arguing over semantics, on the presumption the article is precisely written and perfectly accurate. I think the best step here is to just sit back and wait for more information.

And today the real story comes out that its just negotiations between the two over the 30% standard fee with M$ are trying to get a better deal. Just typical business negotiations with both sides trying to get the best deal and hardly anything new.

 

[Oletros]

Certainly they can use their own billing service. They just have to do it totally outside the app that was distributed through the Apple App Store.

So no, they can't use it in the fracking app.

 

[BaldiMac]

Its likely apparent I would love an open iOS...

Out of curiosity, why do you feel that the option to install apps from 3rd party sources would negatively impact you as a user? Let's just say that the app store would remain the same, with the option of manually installing apps added - much like the way I believe a developer account/ID can do.

I understand why Apple and potentially developers may not like this but I cannot wrap my head around why a user would want limitations on what they can put on their device. Sure, a user may not be tech savvy, but its not like they can't just stick to the app store, with no change in user experience.

I wasn't commenting on that in particular, but okay. Completely hypothetically from my perspective only. Not speaking for anyone else.

Your assumption that the App Store would stay the same is not likely. App Store developers would be competing against other stores that would likely require lower margins. That would spread the apps out over multiple stores with multiple policies and multiple payment systems. Apps from other stores would not have access to push notifications or iCloud. It would also complicate the restore process.

Apps that have improved in quality to meet App Store approval could just decide to go the lazy route and submit to other stores.

And most importantly, I would have to troubleshoot all the friends and family who install crappy or malicious apps from these stores that take advantage of private or undocumented APIs that completely screw with the performance of the OS.

Probably a lot more, but that's what comes to mind right away.

So no, they can't use it in the fracking app.

Maybe you should edit your original post to clarify what you meant.

 

[Liquorpuki]

Your assumption that the App Store would stay the same is not likely. App Store developers would be competing against other stores that would likely require lower margins.

Actually the margins would go up because multiple stores would create an ecosystem that's not commoditized. As opposed to one app store, where developers have undercut each other to get on the top 100 apps list to get you to notice their product.

Developers would benefit because they'd be able to charge more. Apple would lose control of their ecosystem though, and wouldn't be able to commoditize mobile software as effectively so their hardware profit would decrease.

That would spread the apps out over multiple stores with multiple policies and multiple payment systems. Apps from other stores would not have access to push notifications or iCloud. It would also complicate the restore process.

Apps that have improved in quality to meet App Store approval could just decide to go the lazy route and submit to other stores.

And most importantly, I would have to troubleshoot all the friends and family who install crappy or malicious apps from these stores that take advantage of private or undocumented APIs that completely screw with the performance of the OS.

These are good points though

 

[gotluck]

I wasn't commenting on that in particular, but okay. Completely hypothetically from my perspective only. Not speaking for anyone else.

Your assumption that the App Store would stay the same is not likely. App Store developers would be competing against other stores that would likely require lower margins. That would spread the apps out over multiple stores with multiple policies and multiple payment systems. Apps from other stores would not have access to push notifications or iCloud. It would also complicate the restore process.

Apps that have improved in quality to meet App Store approval could just decide to go the lazy route and submit to other stores.

And most importantly, I would have to troubleshoot all the friends and family who install crappy or malicious apps from these stores that take advantage of private or undocumented APIs that completely screw with the performance of the OS.

Probably a lot more, but that's what comes to mind right away.

Good points, thanks for humoring me.

I find if interesting that what you describe has not happened on Android / Google Play, regarding additional stores. There is Google Play and there is manually installing apps. I am not aware of any additional stores that are available. Of course, iOS is a different beast and what happens here doesn't happen there, but regardless, it's worth noting that your scenarios haven't played out on Android - at least yet.

I believe push notifications can come from cydia apps already, but iCloud I believe you are correct. It would indeed complicate the restore process.

The part about family and friends, well.. let's just agree to disagree I'm just not a fan of policies that protect people from themselves. Tell them not to enable this hypothetical third party apps switch

It just kills me that iOS products are capable of so much more than Apple allows.

Good day sir.

 

[rjohnstone]

I am not aware of any additional stores that are available.

Amazon's Appstore
It's available to anyone running Android, not just Kindle devices.

 

[gotluck]

Amazon's Appstore
It's available to anyone running Android, not just Kindle devices.

Indeed, I am mistaken, back to waiting for a jailbreak before buying new iOS products I guess...
not that I'm naive enough to think that Apple would ever open up their platform anyway...

 

[BaldiMac]

Actually the margins would go up because multiple stores would create an ecosystem that's not commoditized. As opposed to one app store, where developers have undercut each other to get on the top 100 apps list to get you to notice their product.

Developers would benefit because they'd be able to charge more. Apple would lose control of their ecosystem though, and wouldn't be able to commoditize mobile software as effectively so their hardware profit would decrease.

Sorry for being unclear. I was referring to the margin charged by the store (e.g. Apple's 30%). Prices may well go up or down, but I think other stores would likely undercut Apple's 30%.

Good points, thanks for humoring me.

My pleasure. Interesting question!

I find if interesting that what you describe has not happened on Android / Google Play, regarding additional stores. There is Google Play and there is manually installing apps. I am not aware of any additional stores that are available. Of course, iOS is a different beast and what happens here doesn't happen there, but regardless, it's worth noting that your scenarios haven't played out on Android - at least yet.

I think all my concerns have played out on Android to some extent. With the exception of the push notifications/iCloud thing, of course.

I believe push notifications can come from cydia apps already, but iCloud I believe you are correct. It would indeed complicate the restore process.

Apple's push notification server is only available to App Store apps. Theoretical apps from outside the App Store could theoretically access their own push notification server, but it would require an additional connection for each app. As opposed to Apple's one connection for all approach.

 

[Oletros]

I am not aware of any additional stores that are available.

Apart of Amazon Appstore, I can remember GetJar, AndAppStore, Samsung App Store, Handango and Opera Mobile Store.

 

[japanime]

Just make it a better web App.

Problem solved

That sounds really high tech and totally awesome , tell me more

 

[Windlasher]

Yes there are alternatives to office, but in the vast majority of corporate environments they are not used. Why? Because they are not Office. Simple as that and while some of them are good they aren't 100% compatible and that makes a difference. The same goes for the Project alternatives and the Visio alternatives aren't a patch on Visio.

Apple needs Office because it needs that level of compatibility in the corporate world to be taken seriously. I use a Mac in my every day work, but I'm very much in the minority and I couldn't survive without Office - I've tried.

You tried and failed. Others have succeeded.

 

[ds2000]

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

Its not so much the 30% that bothers me, as a customer, apple take 30% and I have to use it on an apple device, unless I'm very much mistaken and iBooks is available on android.... in which case, ignore me

 

[flottenheimer]

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

Nope. They are taking a 30% commission for handling payments + quality-testing, hosting and serving the apps and their updates. But most of all for giving developers shelf-space in an online store (which they have build, launched and marketed) with millions of visitors that have entered credit-card info and are able (and willing) to 1-click purchase.
Furthermore they promote and market a large number of quality apps through the store as well as through their own marketing channels (TV, print and outdoor commercials, Apple In Store, Facebook, Twitter, Demo units etc.).
On top of that they've build great (from what I've heard) development tools and are serving a huge developer community.

In other words they offer a lot more than being a 'payment processor'. And their business practice is normal. Just ask Wal-Mart, Best-Buy, Groupon, Playstation or Amazon how their system works ...

 

[Stella]

A lot of what you mention you get when you sign up for a $99developer account, it includes the ability to list your app on the AppStore.

You seem to drift somewhat when talking about marketing.

Nope. They are taking a 30% commission for handling payments + quality-testing, hosting and serving the apps and their updates. But most of all for giving developers shelf-space in an online store (which they have build, launched and marketed) with millions of visitors that have entered credit-card info and are able (and willing) to 1-click purchase.
Furthermore they promote and market a large number of quality apps through the store as well as through their own marketing channels (TV, print and outdoor commercials, Apple In Store, Facebook, Twitter, Demo units etc.).
On top of that they've build great (from what I've heard) development tools and are serving a huge developer community.

In other words they offer a lot more than being a 'payment processor'. And their business practice is normal. Just ask Wal-Mart, Best-Buy, Groupon, Playstation or Amazon how their system works ...

 

[BaldiMac]

A lot of what you mention you get when you sign up for a $99developer account, it includes the ability to list your app on the AppStore.

You seem to drift somewhat when talking about marketing.

The 30% also covers those things. It costs billions to run the iTunes Store. The $99 developer fee doesn't quite cover that completely.

 

[samcraig]

The 30% also covers those things. It costs billions to run the iTunes Store. The $99 developer fee doesn't cover that completely.

Can I ask where you have read that the App store costs billions to run? Do you have a source. Genuinely asking.

 

[BaldiMac]

Can I ask where you have read that the App store costs billions to run? Do you have a source. Genuinely asking.

http://www.asymco.com/2011/06/13/itunes-now-costs-1-3-billionyr-to-run/

That was from Jun 2011. I think there's an updated analysis that puts it over $2 billion, but I didn't find it immediately. But the basic idea is that Apple runs the store a bit over break even, so all you have to do is look at their iTunes Store revenues to get a good idea.

 

[samcraig]

http://www.asymco.com/2011/06/13/itunes-now-costs-1-3-billionyr-to-run/

That was from Jun 2011. I think there's an updated analysis that puts it over $2 billion, but I didn't find it immediately. But the basic idea is that Apple runs the store a bit over break even, so all you have to do is look at their iTunes Store revenues to get a good idea.

Hmm. But at the same time - this was before Apple really had active data centers. I could be wrong. Of course those data centers weren't free. I'd be more interested in an article or report that was factual and current vs the opinion piece. Not criticizing you or your source - only that I'm genuinely curious.

 

[BaldiMac]

Hmm. But at the same time - this was before Apple really had active data centers. I could be wrong. Of course those data centers weren't free. I'd be more interested in an article or report that was factual and current vs the opinion piece. Not criticizing you or your source - only that I'm genuinely curious.

Apple has stated that they operate the iTunes Store a bit over break even. All you need to do is estimate their revenues based on quarterly financial statements or other official announcements.

For example, the App Store is up to $4.3 billion per year in sales.
http://www.asymco.com/2012/06/12/the-ios-app-market-sales-run-rate-is-4-billion-per-year/

That's $1.3 billion in revenue for Apple from the App Store that Apple puts back into running the store.

 

[Krevnik]

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.

I know this post is a bit old at this point, but here's the thing you are missing:

- I get Dropbox via the app store.
- I go to Dropbox.com to pay for more space.
- Apple does not get a cut.

*or*

- I get Dropbox via the app store.
- I use the app itself to pay for more space.
- Apple gets a cut.

This is no different than GameStop selling game time cards. If you pay with a CC on Blizzard's website, GameStop doesn't get a cut. But if you buy via GameStop, you do.

Apple is not saying "You must sell your stuff through us". But they are adamant that selling within the app on an Apple device is "selling through Apple". Netflix doesn't offer any in-app purchases, and they are let on. Why? Because they don't sell subscriptions through the app, the app is just a portal. That's the real crux of the issue here. Is Apple right to say that if you want to sell stuff through an app on their devices, that you are selling to the customer through Apple? Microsoft, interestingly enough, seems to follow the same stance with the XBox, although even more strict. You can't even post DLC or the like without Microsoft getting a cut. And then DLC cards in stores like GameStop gives them a cut on top of that.

 

[Azurati]

Could this dispute force Microsoft to focus more on HTML5?

The dispute between Microsoft and Apple has serious consequences for App developers who publish 'free' apps in the App Store, only to then charge users to activate the app or to upgrade to a version with better functionality.

As Microsoft seems to be at odds with Apple's stance that all in-app purchases should require a 30% payment to Apple (in perpetuity), will this force app developers to develop HTML5 web apps to by-pass app stores?

This blog article looks at this in more detail: http://tinyurl.com/awgmapw