Microsoft Pushing Apple to Rethink the 70/30 App Revenue Split

Apple enjoys 30% of every sale made on the App Store. This has been in place since the release of iPhone OS 2.0, and has been a source of reliable, if not earth-shattering, income for Apple ever since. As the company puts it, it helps pay the bills of keeping the largest repository of apps running in the world.

But according to Microsoft, it is too much. Microsoft has a few select applications on iOS already, including their Skydrive program, but the Redmond-based company is supposedly looking to move their cash-cow Office brand to Apple’s mobile platform early next year.

Office for iOS has already leaked before, and rumors of the program making its mobile debut have been swirling about for at least a year. At this point, it seems more of a matter of “when” than “if,” and signs are pointing to a launch date of early next year.

Microsoft’s Office suite has long been considered the premier productivity suite. However, the rise of mobile computing and the rise of the web have brought more competition in to the spotlight. Google Drive offers robust editing and collaboration tools on the web, as well as continuous backup. Google Drive is accessible on any computer with a web connection, and is free to use. Other options, including Apple’s iWork suite, have gained popularity on the mobile side of things.

With the release of Office for iOS (and Android) and the expansion of Office 365, Microsoft hopes to face these challenges head-on. However, because Microsoft is trying to move to a subscription-based model for their Office products, Apple’s 70/30 revenue split would severely cut in to Microsoft’s  earnings.

This round of negotiations will be of interest to all developers: any changes made as a result of this will likely apply to all developers, as the media repercussions of having the exception apply only to Microsoft would be brutal towards Apple. So, with that in mind, the renegotiation is likely of interest to most developers. Apple’s current terms are high – Microsoft’s own app marketplace for Windows 8 and Windows Phone 8 also takes 30% of revenue, but that percentage drops when a developer reaches more than 10,000 sales.

Apple’s terms may well be reduced. With the mixup of leadership in Apple over the past year, it’s difficult to predict what exactly the Cupertino company will do.

[All Things D]

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One response to Microsoft Pushing Apple to Rethink the 70/30 App Revenue Split and 3 more on the forums.
  1. The Apple Company are pigs. They can’t get enough of every cent that comes near their pig sty.
    It’s the most paranoid company in the world.

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