Yesterday, The Next Web broke a story on some problems between Apple’s App Store and Microsoft’s attempts to update its SkyDrive for iOS app, which was confirmed to The Verge today by Microsoft. In a nutshell, since Microsoft offers upgraded storage for a fee, Apple wants a 30% cut if a user purchases upgraded storage through an iOS app, and because SkyDrive has a “sign up” button on its login page, Apple wants to limit 3rd party apps that utilize SkyDrive storage, too.
Apple introduced its new subscription policy back in February 2011, described in a press release, and is pretty clear about what it expects from apps on the App Store. Apps must pay Apple a 30% share of new subscriber revenue, any subscriptions offered outside the app must also be available from within that app, so that “customers can easily subscribe with one-click right in the app”, and “publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app”.
The problem, or one problem, is that SkyDrive’s extra storage, which is a one time purchase of additional storage, does not fit cleanly into Apple’s model, and Microsoft is apparently balking at the idea of paying Apple 30% of a purchase fee that may or may not ever be accessed from an iOS app again. The Next Web explains:
Microsoft does not appear keen to pay Apple the 30% cut, as it lasts in perpetuity, regardless of whether a user continues to use an iOS device or not, as the billing is through their Apple account.
Therefore, if a user signed up for a few additional gigabytes on their iOS device, and then moved to Android or Windows Phone or not phone at all, for the length of their account, Apple would collect 30% of their fee for storage. This hasn’t sat well with Microsoft.
Microsoft 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.
So while additional SkyDrive storage doesn’t appear to be a “subscription service”, even as defined by Apple’s press release:
Apple® today announced a new subscription service available to all publishers of content-based apps on the App Store℠, including magazines, newspapers, video, music, etc.
…Apple still intends to take its cut, and unless Microsoft and Apple can come to agreement, Microsoft’s strategy of cross platform access to its products and services may take a hit.
What do you think, is SkyDrive a “content-based” subscription service, or should Apple back off?