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Apple, Microsoft reportedly spar over 30 percent cut of in app purchases

Apple, Microsoft reportedly spar over 30-percent cut of in-app purchases

By Kunal Dua | Updated: 12 December 2012 15:22 IST

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Microsoft and Apple are reportedly at loggerheads over latter's insistence of applying its policy of taking a 30-percent cut of all in-app purchases on Microsoft's high-profile apps.

Microsoft's SkyDrive app for iOS has been a talking point off-late after reports emerged that Apple was sitting on an update to the app allegedly due to a dispute over its share of revenue from SkyDrive subscriptions bought within the app.

Now a report in AllThingsD confirms that Apple indeed rejected - not just delayed - an update to the app, as part of a general disagreement with Microsoft that extends way beyond the SkyDrive app. According to the report, the real dispute is over the widely anticipated Microsoft Office apps for iOS, due to release in 2013.

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.

AllThingsD further notes that Microsoft believes the launch of Office apps will bring additional creditability to the iOS platform, especially amongst enterprise users. Microsoft feels that the 30-percent cut is too high and wants special terms negotiated for its apps.

Apple, on the other hand, seems to be in no mood to set what might be a dangerous precedent, and wants to apply the rules uniformly to all apps and developers.

Apple declined AllThingsD's offer for a comment on the developments but did provide a generic statement on its revenue-share rules.

"Apple provides customers and developers the largest selection and safest way to discover apps with our curated App Store. We've designed our rules to be fair and consistent for every developer - free apps and services are distributed for free, paid apps and services provide a revenue share to Apple. We've paid out over 6.5 billion dollars to our developer community who have created over 700,000 apps."

Microsoft failed to respond to a request for comment by the time AllThingsD report was published.

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