“Sources familiar with the ongoing negotiations between Apple and Microsoft tell AllThingsD that the companies are at loggerheads not over the 30 percent commission Apple asks of storage upgrade sales made through SkyDrive, but over applying that same commission to Office 365 subscriptions sold through Microsoft Office for iOS, which is expected to launch sometime next year.” iOS could end up being the only mobile platform without Office.
I hope Apple doesn’t back down. It will be interesting (entertaining) to see how this effects the Windows Store, Play Store, RIM, Dropbox, Amazon Cloud Drive, Google Drive, etc, etc….. How asinine can things get!?!?!
Having devices and operating systems that force users and developers to pay 30% fees to the apple gatekeepers for applications is bad enough. But having to pay apple fees for ongoing subscriptions and other transactions is ridiculous.
Just think about what it means for a moment. If we were to write an ios app for our own store (one of my clients sells marine parts), apple would demand a 30% cut…it’s appalling. Oh just keep the IOS app for browsing but redirect to the website for transactions, right? No, apple’s banned apps with links to websites that potentially make money without giving apple a commission. They feel entitled to own us at every turn.
All this while we were so worried about network carriers becoming the dictators of our technology, but it could be the OS gate keepers who’ll succeed.
Edit: MS obviously have their own little walled garden they’re guilty of too. But as they say “two wrongs don’t make a right”.
Edited 2012-12-13 04:34 UTC
If you sell marine parts Apple doesn’t pinch 30%. They don’t make any money if you buy/sell stuff via the eBay app.
They want 30% of any transactions related to the app use. In this case it’s Office 365 subscriptions. If you have an app that allows such a thing they must be able to purchased via the app, I agree this is user friendly, but then Apple takes 30%, which I think is less fair.
I think Apple can charge 30%, but to a certain maximum and that maximum should be rather minimal. They can charge what they want, but it should have some relation to costs, effort and a small profit margin.
It doesn’t costs Apple anything more or less if someone does or doesn’t subscribe to Office 365. Any percentage they take is pure profit.
Well, apparently, this is not limited to the “use of the software”, or this definition extends so broadly that it does, indeed, extend to purchases done with the software (which i think is the case).
Take the example of newspaper : they have to give up a 30% cut on the content price. New article, new content, same software, but 30% cut by Apple (+ : they actually hide who the customers are, to stay in charge, therefore the newspaper does not know who its customers are !)
But well, since Apple can kill any app off its appstore, they are entitled to enforce any decision they want. The other side either abide, or die.
Yes, it also includes subscriptions, add-ons, plugins.
You can get free apps or paid apps, that allow you to extend them with more functions at a price, which Apple takes a 30% cut in.
eBay doesn’t extend the app or offers subscriptions, but you can buy/sell stuff using it and Apple takes no cut.
In the case of subscriptions, if there are any Apple demands they can be made using the app and they get a 30% cut. So you can’t offer a link to your website and have people subscribe there.
In the case of Office 365 subscriptions it seems to me Apple is taking 30% of the price without doing anything for it or giving anything back. Then again if they make an exception for Microsoft others will demand the same treatment.
Microsoft do have costs and the need your money to make it work, which makes it difficult if Apple takes a 30% bite out of it.
I think Apple should, if they really want a cut, limit it to 1% or some small symbolic amount. It’s not where the real money is for them and I think they win more goodwill and even make more money if they dropped this.
“Microsoft do have costs and the need your money to make it work, which makes it difficult if Apple takes a 30% bite out of it. ”
Well, in this case, Apple just refuse to make an exception for MS: 30% is for everybody, big or small player.
One can argue whether 30% is fair or not, but I don’t see how to blame Apple to treat MS as any other developer.
I don’t think Microsoft should get special treatment, but I do think 30% is a lot of money for what Apple gives in return.
If it’s apps and app extensions I can understand, because that’s code hosted on Apple’s servers. Subscriptions aren’t. These are costs for who ever is providing a service to subscribers. In this case Microsoft and they need to cover these costs and make a profit, which is hard to do if someone grabs 30% and doesn’t give anything in return.
Also 30% is relative. Of $1 it’s 30 cents, but of $30 it’s $10. Why not use 30% and hard cap it at $2? Or $4, $5?
The more stuff is in the app store the more appealing iOS devices will become. Apple should be less motivated grabbing money from companies who increase the value of Apple’s iOS ecosystem.
“Apple should be less motivated grabbing money from companies who increase the value of Apple’s iOS ecosystem.”
Companies who greatly benefit from iOS ecosystem.
This is just business and don’t forget that there is an easy solution by not providing in-app purchase which should not be a real problem in this case for Office.
If they don’t provide it in-app they can’t provide it out-app either.
This is plain wrong.
Relay for example is a French kiosk app which doesn’t have in-app purchase but allow reading magazines purchased through a subscription you can buy on their web site.
I’ve looked it up and Apple states this:
Offer Content to New and Existing Subscribers
If you offer auto-renewable subscriptions, you can also use other methods to acquire digital subscribers outside of your app. You can sell digital subscriptions on your website or provide free access to content for existing subscribers. In these cases there is no revenue sharing since Apple was not involved in the transactions. Developers keep 100% of the revenue. If you would like to make a subscription offer outside of the app, the same (or better) subscription price must be offered inside the app for users who wish to subscribe from within the app. In addition, you may not provide links in your apps which allow the customer to purchase content or subscriptions outside of the app.
Source: https://developer.apple.com/appstore/in-app-purchase/subscriptions.h…
“If you would like to make a subscription offer outside of the app, the same (or better) subscription price must be offered inside the app for users who wish to subscribe from within the app.”
You misinterpreted this sentence: the whole paragraph starts with “If you offer auto-renewable subscriptions”. It doesn’t apply if you don’t use the AppStore auto-renewable subscription option.
If you HAVE in-app subscription, then the price has to be the same or less than out-app subscription.
But you don’t NEED to have in-app subscription if you have out-app subscription: there are several examples of such app currently available in the App Store such as Relay as I previously mentioned or for example DropBox which has issue because at some point they provided a link to their web page, but once removed Apple accepted it.
Edited 2012-12-14 14:59 UTC
I had it nearly right! 😉
Nearly, but it makes all the difference
MOS6510,
“eBay doesn’t extend the app or offers subscriptions, but you can buy/sell stuff using it and Apple takes no cut.”
Isn’t that because of how ebay charges venders rather than user directly for the service, which is not ad supported either? If either of these conditions didn’t hold, I suspect apple would be demanding a cut.
If OSNews had an IOS app, as I understand it they’d owe 40% of advertising proceeds to apple even if the ads were only shown after a user clicked out of the app onto the website.
http://www.guardian.co.uk/media/greenslade/2010/sep/16/apps-newspap………
“In the case of subscriptions, if there are any Apple demands they can be made using the app and they get a 30% cut. So you can’t offer a link to your website and have people subscribe there.”
It goes beyond that unfortunately. Apple want a cut on external subscriptions as well.
http://mashable.com/2011/01/14/apple-no-free-ipad-newspapers/
I suppose some people might be fine with apple getting a cut of everything. You suggest having a 1% “symbolic” amount, but it’s certainly a slippery slope and it symbolises apple’s entitlements. Apple seems to want cuts on everything whether they’ve earned it or not. I feel the consumer would be better served if apple’s store would compete on merit with independent app stores.
Edited 2012-12-13 15:44 UTC
eBay is not a good example, since it’s not eBay that is making the money. eBay is just a transaction processor.(But I’m pretty sure that you still have to register on ebay.com for an account, before using the app. Thus it’s not really against Apple’s rules)
Is there some physical goods store app does direct sales registration and sales in app? (And I mean where the seller is the app publisher, not a third party.)
However, any transaction that is handled by Apple having a 30% cut is perfectly reasonable.
Doesn’t seem to have hurt them much thus far.
It’s been available for free for some time.
http://site.cloudon.com/product/
Obviously you don’t read the news. Apple is getting absolutely slaughtered in virtually every market except the USA.
errr. No they are not. Not the tablet market. Not in the UK.
Give it time
“On a long enough time line. the survival rate for everyone drops to zero…”
And not because the lack of MS Office.
And where do I get Microsoft Office for Android, exactly?
http://site.cloudon.com/product/
Warning! Link at site actually redirects to:
https://play.google.com/store/apps/details?id=com.cloudon.client
(Still free though.)
Sorry for the double reply – I almost edited my previous post in time!
But this is so timely – read http://www.theregister.co.uk/2012/12/13/windows_market_share_just_2….
According to GS, from 2000 to 2011, Apple’s global personal computing market share went from 7% to 23%, Google’s from 0% to 33%, and Microsoft’s from 93% to 25%.
Now, which of those three offers Microsoft Office?
Most young people I know would use Google Drive even if MS Office were free. It’s collaborative, ubiquitous, and more than good enough for most personal use. And LibreOffice is fine for all but the heaviest lifting – I wrote and published my book entirely in it, for example. MS Office still matters in business, but it’s no longer the only show (or even the best show) in town.
Does that lump smartphones in with PCs? Because if it does that’s f–king retarded.
Edited 2012-12-13 23:14 UTC
A
FFS – a samrtphone isn’t a personal computer!
Ah, semantics. Apple ran ads arguing that a Personal Computer must run Windows, and a Mac was a different product altogether. Agree?
Don’t look now, but people are doing many of the same types of computing on mobile devices as on desktops and laptops – communications, reading, banking, planning, working, playing. You know, personal computing.
And the operating systems are converging – OS/X is becoming more like iOS (I hear), I run Android apps on my Linux desktop (precisely the same kernel, btw), and Windows 8 pretends to be the same on both (don’t look at that processor behind the curtain!).
More importantly, people are increasingly choosing to buy mobile devices instead of Wintel PCs to do their personal computing. Not everybody, of course – geeks especially will always want maximum power on at least one device – but the bulk of the market has clearly switched, and that’s where vendors are innovating now because that’s where the market is growing.
Same use cases + same buyers + converging operating systems = same effective market.
I don’t see much point in pretending that a 103 keyboard is required to call a device a “personal computer”. The most practical definition of a “personal computer” IMHO is a device on which computing for one person at a time takes place – phone, tablet, laptop, desktop, workstation, whatever. This is similar to how cars, trucks, motorcycles, and a few others are all personal transportation, I guess.
But it’s semantics, so we could argue in circles all night. *shrugs*
Not really. A Mac is a PC.. *head explodes* This is a bit like the 1970’s “Pepsi challenge” in the UK. At the time, Pepsi were not allowed to name another brand in their advertising, so they used the term “another leading cola”. Equally, what would one call a consumer Windows PC if one wanted to remove the word “Windows(tm)” and were trying to be “generic”? Errr… PC. What would one Call a Macintosh branded personal computer if one wanted a similar level of simplicity? Mac. This is the common parlance, after all. No matter what the factual truth of the definitions are.
OS X. It helps if you know what you are talking about. And, no, it’s a long way away from iOS.
Arm or IA32/x64? With ARM we might believe you… with Intel you might run “some” apps with major caveats due to the native extensions being in ARM. But then again, Dalvik is a VM – running the majority of Android apps that make no use of the NDK is pretty straight forward, so long as you’ve ported the runtime. This is no different to running any Windows app compiler with MS.Net under Mono on Linux or Mac OS X.
Both of what? Processor? No it doesn’t. It does nothing more than LINUX does when you run a PowerPC distro, or BeOS did on both PowerPC and Intel or Android does on ARM, MIPS or Intel. You seem to have not gleaned the simple idea that one OS can run on different platforms quite happily. As an example, I used BeOS on PowerPC then Intel… I didn’t think the Intel port was “pretending to be BeOS” because it couldn’t run PowerPC apps. I also used Openstep on Intel hardware, but I didn’t go around thinking that the 68000 or RISC based versions (SPARK/HP and fabled PowerPC) were imitations or pretending to be anything more than fully functioning ports. You comments seem pretty naive.
Desktop PC’s are struggling, but tablets have still got a long way to go before the oust Laptops. And the most popular Tablet I see commuting in the London every day is the iPad (iPad 1’s, and the newer shape that could be a 2, 3, or 4 – not seen a mini yet.) I see as few Android tablets as to make them seem extremely niche and I have seem maybe 1 Blackberry Playbook and zero surface so far. I see more eBook readers, such as Kindles, than anything else though.
You can argue in circles, but the circles seem a bit wonky from where I’m standing.
Um, that was a rhetorical question in response to “a samrtphone (sic) isn’t a personal computer!” Hence, “ah, semantics”. I’m not really interest in debating such terminology!
It helps to read what Apple CEO Tim Cook actually says before insulting me. “We see that people are in love with a lot of apps and functionality [on the iPhone]. Anywhere where that makes sense, we are going to move that over to Mac.” The term commonly used in the media for Apple’s strategy to port OS concepts from iOS is “convergence”, hence “I hear”.
x64. Again, google “run android apps under linux”. Dalvik is a VM, and many Android apps are either pure Dalvik or are open source so that the native parts can be easily ported. Don’t care if you choose to believe me or not, reality is reality.
I didn’t say tablets have ousted laptops.
And you are really going to argue that your experience on a single commute in England is more valid than global market research? Really?
And this was why I shrugged…
Analysts are full of horseshit. That is the only real “fact”.
But that’s because no platform has Office. The popularity of Office in business is not to be sneezed at, and I can guarantee you that it’s a selling point. How much so remains to be seen, but to dismiss its importance just because tablets have been doing fine so far is quite shortsighted.
The days of charging an arm and a leg, or frankly even a couple fingers for an office suite are long gone.
MS is doing everything possible to retain the historic revenues and profitability of office. They will fail at this and frankly they should.
Ability to run (or interact with) Office has been one of Microsoft’s main value propositions for their phone OSes. And yet their market share there has dropped like a lead balloon: from almost 40% down to 3% in 5 years (it has regained some ground in the past few months though).
IMO. What Microsoft never got right, until recently, is that usage patterns for mobile devices are different than desktops’. I.e. almost nobody gives a shit about running Office on a phone.
Funny thing is, they’ve tried to go in the exact opposite direction, e.g. Metro. Yet, Office on Windows RT has no touch optimizations, and is virtually the same as Office on your PC. It’s as if Microsoft don’t really have a coherent idea where they’d like to go, and are trying to do everything at once and failing more than succeeding. While it’s cliche, the phrase “jack of all trades, master of none” comes to mind when thinking about Microsoft recently. Add to that, I’m not sure how much adoption they’ll get on a subscription basis. Most people are already paying enough for various services as is and, especially if they’ve already bought Office for whichever computer they have, I don’t think repeated payments to Microsoft will sit well on top of what Office already cost them.
Yeah, it’s almost like they can’t help themselves. The “desktop” paradigm is so entrenched in microsoft’s corporate culture, that they almost can’t fathom anything with a CPU and a display not being a “desktop.”
They decide the rules, and it is important they apply them in a somewhat uniformly manner.
That said, I feel like their limitation is ridiculous and they’re the only app store that does it (afaik). I don’t care much for iOS, but Microsoft is put in an interesting position.
Of course, it’d be hilarious and the shoe was on the other foot and Microsoft was charging Apple 30% of revenue of a hypothetical Metro iTunes client.
Nelson,
I don’t have a problem with apple deciding the rules for their application store, none what-so-ever. What I do have a problem with is apple dictating what consumers can do on devices that were supposed to have rights transferred to the owner at the point of sale. DRM enables apple to extend it’s control onto devices it no longer legally owns, which is immoral.
I’m hoping the more progressive EU countrymen will step up and set things right. You’re the only hope because US politicians are all on corporate leashes.
Edited 2012-12-13 05:48 UTC
I don’t think we’re reading the same article, because DRM is mentioned no where in this article.
My enthusiasm about letting you be a pedant is probably right up there with getting a root canal.
Nelson,
It surprises me that you are arguing over pedantry rather than the point being made, is it possible that you actually agree? That’d be nice for a change if that were the case
In general I agree with the fact that DRM can be obtrusive and detrimental to a good experience, but I also think that there is a lot of hyperbole when these kind of discussions are had.
That’s likely as close as you’ll get
It just might be the case, if they have a no competing music stores clause for Win8/9 Marketplace.
It would be “hillarious” if Microsoft managed to kill the biggest reason to buy an Apple media device for the majority of people(who mostly run Windows)
Apple should be able to charge anything they want to give any other company access to their hundreds of millions of users.
No different then Google charges customers for access to their ad network. The charge is just applied at a different place in the relationship but the charges are still there.
As for being the only platform not having office, is it really Office? Without a office 360 account etc its worthless from reports so far.
In my opinion, MS needs to be on iOS more than Apple needs Office on its platform. However that doesn’t mean that things won’t change.
I walk around University and the majority of students are using Macbooks and iPads. At the same time, the iPad is very popular in the business sector. Walk around central London and you’ll notice the trend.
So, a significant share of emerging graduates are growing up using the Mac platforms, while at the same time current businesses are adopting it more and more.
Who needs whom the most?
Now… if only the majority of the graduates constituted the majority of the consumers. Which isn’t the case.
Macs are taking over a small segment. The vast majority of business is conducted on Windows. And will be for a long time.
Unless Apple manages to get out a serviceable MacBook for under $1000, Windows in enterprises isn’t going anywhere.
I have recently been shopping for a new phone and laptop in Brisbane Australia. The Apple products are being ignored despite hard sell tactics. However the Windows and Android models are very popular.
According to Apples terms, they get the 30% perpetually for all future purchases also. So let’s say I have a small to medium business with one employee who uses an iPad and everyone else uses either surface or a nexus 10. After I purchase an app through Apples AppStore, all other purchases made for other platforms also give Apple 30%.
These purchases are in no way related to Apple, but still, because at on time I used an Apple product, they will profit from me anytime I make in app purchases on other platforms.
This is milking other developers in ways that cost the consumer. These developers have to add that 30% cut for Apple into the price we are charged.
No thank you Apple, I will not be doing business with you, especially seeing as how you block developers from updating apps in order to bully them into agreeing to your terms.
There are benefits to a closed system, but these benefits are outweighed when the system abuses it’s power.
Edited 2012-12-13 12:25 UTC
“After I purchase an app through Apples AppStore, all other purchases made for other platforms also give Apple 30%.”
What are you talking about? Either I don’t understand at all what you said or you just do not know what you are talking about.
Apple take 30% on all transactions going through the AppStore: no more, no less.
Edited 2012-12-13 14:59 UTC
We’re not in any monopoly situation here. People just need to stop buying apple products and tell them why. When it gets too painful for apple they’ll maybe change their policy. The way things are going it looks like android is going to dominate the market numbers wise. I’d like for there to be another player in the market, I’d prefer it not to be MS or require MS or Apple products for development.
And the vast majority of people don’t have a magpie complex… oooooh SHINY!
GREAT!
hope that ROM Logicaware adopt Papyrus to iOS
http://www.papyrus.de
Is this really the killer app?
To be fair I did pay for an office suite on my damn phone (no service, might as well be tablet) but recognized it as a dumb move* and have since stopped writing on the thing entirely. Also I have a droid 3 with a qwerty, so very slightly less dumb.
*rtf, thats all I wanted. Thats why I paid $15, to edit rtf.