Apple takes their usual 30% cut of Microsoft’s Office for iPad subscriptions

“While one of the big holdups for Office for iPad was getting the software just right, another was Apple’s policy that apps that sell things — including subscriptions — use Apple’s in-app purchase mechanism and hand over 30 percent of that revenue to Apple,” Ina Fried reports for Re/code.

“Indeed, Microsoft does offer Office 365 subscriptions within the just-released Word for iPad and the other Office apps and, yes, it is paying the 30 percent cut, Apple confirmed to Re/code,” Fried reports. “Microsoft declined to comment on the matter.”

“Meanwhile, on Twitter, both CEOs were playing nice-nice,” Fried reports. “‘Welcome to the iPad and AppStore,’ Cook said in a tweet. Nadella replied in a tweet of his own: ‘Thanks @tim_cook, excited to bring the magic of @Office to iPad customers.'”

Read more in the full article here.

MacDailyNews Take: Ah, the “magic” of overpriced bloatware.

Smart users will continue to use Apple’s iWork which is free, not hobbled in order to force unending subscription fees, and works seamlessly across iPhones, iPads, Macs, and Web browsers.

In related news, clueless UBS analyst Steven Milunovich claimed Thursday, “We do not expect Apple to take a cut from Microsoft.”

Nothing like talking out of your ass, huh? An particular specialty of far too many “analysts.”

[Thanks to MacDailyNews Readers “MotivDev” and “Rayzor” for the heads up.]

Related articles:
Microsoft releases hobbled Office for iPad; requires $100/year subscription to create/edit documents – March 27, 2014
Microsoft CEO Nadella to use his first press conference to talk a lot about Apple – March 27, 2014
Microsoft Office for iPad: 5 big questions – March 26, 2014
Microsoft CEO Nadella expected to finally admit holding Office for iPad hostage a failed strategy – March 26, 2014
Microsoft Office on iPad: Too little too late? – March 23, 2014
iPad generation shuns Microsoft Office; one of Microsoft’s biggest squandered opportunities – March 14, 2014
Apple makes the world’s most advanced operating system freeware – October 23, 2013
Apple’s new free OS X for Mac hurts Microsoft and the Windows PC industry in myriad ways – October 22, 2013
Apple exploits Microsoft’s confused hesitation on Office for iPad – October 22, 2013
Apple’s OS X Mavericks available today free from the Mac App Store – October 22, 2013
Apple releases next-gen 64-bit iWork and iLife apps for OS X and iOS; free with new Macs and iOS devices – October 22, 2013

36 Comments

  1. I don’t see the problem MDN. Who cares if it is bloatware. If people want to pay for it, let them. Apple will collect 30% of every purchase for doing nothing but letting Microsoft put it on the App Store.

  2. “We do not expect Apple to take a cut from Microsoft.”

    On what basis Mr. Anal-cyst do you make this baseless opinion? Do you think Apple in gratitude will cut Microsoft a break due to a previous 5-year Mac Office agreement back in the late 90’s? …… NAH! How great Apple can now “cash in” on Microsoft, with all 27 iPad Office 365 subscriptions.

  3. Microsoft and Apple will BOTH benefit.

    I like the idea of CHOICE for the tools you need and are familiar with, not to mention meeting IT requirements in the workplace.

    A lot of us are not so lucky to work in an all Mac workflow environment or have the time to learn a new program.

    The circle is complete and the halo affect has begun ANEW. More Apple sales, not just iPads …

    1. Entertainment-wise, Satya Nadella following Steve Ballmer is like George Lazenby following Sean Connery, or Jay Leno following Johnny Carson, or Boris Spassky following Tigran Petrosian.

        1. They are called stars for a reason: self-gravitating bodies, they attract the masses to their orbits, and shine with an energy worshiped by their lessers; every eye is beholden to them. Their demise is either spectacular or pathetic. The only way they are unexceptional is in their number and ubiquity; for all that, their blazing glory is the embodiment and the symbol of our aspirations.

          Irrelevant? In other schemes of thought, yes, although each is thinly narrow, a mere slice — however silvery — of the wide firmament of human feelings and instincts, mapped as mythic heroes onto the constellations overhead.

  4. How does Apple apportion the $99 annual subscription fee for Office 365 to the desktop and iOS versions of MS Office. I know the article says $30 but would it be correct to attribute the entire $99 to iOS only. What about the cost to Microsoft of developing the desktop version.

    How does Apple know that I am an Office 365 subscriber and that I am not using the free version of Office for iPad. Is every Office for iPad activation sent to the iTunes server.

    What if I’m paying a monthly subscription to Office 365. Does an activation code get sent to iTunes every time I renew my monthly subscription.

    1. Annual subscriptions purchase though the in-app purchase are subject to the 30%. Purchases made through Microsoft’s website are not. I imagine if you don’t pay you’ll no longer have access to your documents. Sounds like extortion if you ask me. Good luck if you go this route.

      1. The model makes perfect sense. Those who are already paying for the desktop subscription get free apps to extend the existing functionality and Apple gets nothing.

        People who don’t have the desktop subscription and would like to have a full version of Office on the iPad will pay for it in-app, giving Apple 30%. This is only fair, since this is a customer that Apple singlehandedly brought to Microsoft (a customer who otherwise would never get that Office subscription), so Apple deserves its “finder’s fee” share.

        The remaining question is whether this customer is now a bona-fide subscriber to Office 365, and can therefore access desktop applications as well.

  5. Ok, there’s slightly more clarity in a Reuters article.

    Apparently Apple only gets its 30% cut if a consumer downloads and buys (activates) an Office 365 subscription through his iPad.

    Corporate subscriptions are not charged 30% on the iTunes Store.

    The article only addresses annual subscriptions and is silent on monthly subscriptions. Presumably you can only opt for an annual subscription if you activate Office 365 on your iPad.

  6. I think Apple is being very fair here by focusing 30% iTunes charges on downloads by the consumer since it is a predominantly consumer oriented company.

    And leaving aside the larger piece of the pie that is on the table, ie. corporate subscriptions to be wholly consumed by Microsoft shows astuteness on Tim Cook’s part.

    Fair but not Shylock-like.

  7. Not exactly…

    Apple gets 30% of the revenue from those users who subscribe to Office 365 from within one of the apps.

    If you’re already an Office 365 subscriber, you simply download one of the apps (for free) and go into trial mode. Then log into your existing Office 365 account.

    Apple gets $0 from users that don’t subscribe from within the app.

Leave a Reply to Predrag Cancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.