Apple and Microsoft at odds over SkyDrive revenue

What's really going on?

The SkyDrive app may not have much of a future on iOS according to a new report detailing Microsoft's refusal to share revenue with Apple.

Microsoft recently introduced the ability to purchase more cloud storage for SkyDrive in-app, and reportedly balked at sharing that revenue with its Cupertino cohort.

The App Store's policy dictates Apple will receive 30 percent of all app sales, as well as 30 percent of all revenue generated by in-app purchases.

Apple would continue to earn 30 percent of the SkyDrive subscription fees even if a consumer no longer used an iOS device, which caused Microsoft to rethink its stance on profit-sharing.

As a result, Apple is now blocking Microsoft's latest update to SkyDrive, despite repeated tries from Microsoft to work out some kind of arrangement.

Third-party problems

Sources familiar with the issue told The Next Web Microsoft has been trying to work out a compromise with Apple, but hasn't had much success.

Microsoft reportedly even said it would remove all subscription options from the app, thus removing the SkyDrive app's ability to generate revenue, but Apple rebuffed the offer.

Since neither party has been able to resolve the issue, an update fixing a bug that crashes SkyDrive on iOS hasn't been pushed to consumers.

Microsoft confirmed in statement to several news outlets, including The Verge, that its latest SkyDrive iOS update is being delayed by Apple, though there was no mention as to what was causing the hold up.

"Similar to the experiences of some other companies, we are experiencing a delay in approval of our updated SkyDrive for iOS," a company spokesperson said.

"We are in contact with Apple regarding the matter and hope to come to a resolution."

Even more disconcerting are the ramifications being felt by developers who have third-party apps that work in conjunction with SkyDrive.

Several of the apps in question require users to sign into SkyDrive, but Apple's review team has denied such access claiming "the log in interface must be native and not a link or a web view."

In other words, since users won't have to log in through Apple, and would instead be able to log in through Microsoft, the apps are being cut off until Microsoft agrees to pay.

The whole story?

Though The Next Web's sources point out this SkyDrive tussle is causing mounting friction between Apple and Microsoft, there may be another twist to the story.

According to AllThingsD, the squeeze is being put on SkyDrive due to Microsoft's desire to renegotiate the 70/30 revenue split with Apple over Office 365 subscriptions.

The sources close to the matter didn't divulge just what kind of split Microsoft was seeking instead, but did say Apple is reticent to change its policies, even for a massive money maker like Office.

Office Mobile for iOS isn't due to arrive until sometime next year, which gives Microsoft some time to continue negotiations with Apple, even if those talks come at the cost of SkyDrive's users.

Apple's policies shouldn't be new information for anyone involved in developing apps for iOS, so it will be interesting to see just how much flexibility will be given to Microsoft as the discussions progress.

TechRadar asked Microsoft and Apple for further comment, and will update this article when and if the companies respond.

Via The Next Web, AllThingsD