Apple Wants Bigger Cut From Microsoft's SkyDrive App

By Khurram Aziz | Dec 12, 2012 09:38 AM EST

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Apple and Microsoft are headed for war over the latter's SkyDrive cloud storage app on the iOS for which Apple is demanding more money than Microsoft is willing to give.

Apple is reportedly blocking further updates for the app on its App Store until Microsoft agrees to pay 30% of the revenue it generates through subscription.

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The news was first broken by The Next Web which reports sources close to Microsoft as saying that the company has persisted in trying to work out a compromise with Apple, but has thus far failed to come to an agreement.

"The company offered to remove all subscription options from its application, leaving it a non-revenue generating experience on iOS. The offer was rebuffed," said The Next Web.

Apple seeking 30% of the revenue an app generates is nothing new. It's a standard commission the company charges on every app it sells on the App Store, including for every in-app update downloaded to an iOS device. Apple takes 30% of that fee and then passes the rest of the money onto the developer, something that hasn't changed since the App Store opened its doors back in 2008.

However, Microsoft argues that it shouldn't have to pay Apple a 30% cut because the service isn't exclusive to iOS. In other words, just because a user buys an upgrade, for example to increase storage, doesn't mean they'll necessary use that extra storage on their iPhone or iPad - they could instead only use the app on an Android or Windows Phone handset and never use SkyDrive on an iOS again. The fact that Apple still gets 30% of Microsoft's revenue is something the company thinks is unfair.

Microsoft has offered to take away the ability to purchase subscriptions via iOS devices, but Apple says if it tries to circumvent paying the 30% cut that way, then the app itself won't be allowed in its App Store.

Some third-party developers that build iOS apps that access SkyDrive are already reporting problems.

On Microsoft's Live Connect Developer Center,a user called Oliver Toast said they had an iOS app rejected due to the presence of a "Sign Up" button.

"Our iOS app "Files Pro" includes support for SkyDrive using the official Live SDK," said the user. "According to Apple the presence of this button violates their guideline that: 'Apps that link to external mechanisms for purchases or subscriptions to be used in the app, such as a 'buy' button that goes to a web site to purchase a digital book, will be rejected.' We have temporarily worked around the problem ourselves. But we would like to know if Microsoft plan to address this by removing the 'Sign Up' button for iOS clients?"

In a statement emailed to CNET, Microsoft confirmed it was experiencing problems in approval of the updated SkyDrive app for iOS.

"We are in contact with Apple regarding the matter and hope to come to a resolution. We will provide additional information as it becomes available," Microsoft told CNET.

In the meantime, iOS users are stuck with a SkyDrive app which hasn't been updated since June.

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