Report: Apple, Microsoft lock horns over iOS Office revenue split
But Microsoft's in a tough spot, and may be forced to swallow Apple's 30%.
"There are two conundrums here for Microsoft and Office," said Miller. "One, while there's an almost unspoken rule that the iOS apps will sell at some kind of price, Microsoft may not be able to charge what Office is worth."
App Store prices are notoriously low, and higher-priced software is rare. Apple sells its application apps -- Pages, Numbers and KeyNote -- as an alternative to Office, charging $10 each. Even that's high for the App Store.
But if Microsoft charges more -- something Miller argued could be justified -- to the tune of $15 or $20 an app, iOS customers would likely balk.
Second, and more important, said Miller, is that Microsoft wants to move all Office customers off "perpetual" licenses that let customers use the software indefinitely for a one-time, up-front fee. Instead, it would like to shift customers to a software-by-subscription model with recurring payments.
Most enterprises already pay for Office using subscription-style licensing agreements, called Software Assurance. In fact, those agreements account for the bulk of Office revenue. But Microsoft is pushing Office 365 subscriptions even to those large customers. "Microsoft seems to want to move everything to subscriptions," observed Miller. "They're really trying to get everything to subs."
His point: If Microsoft wants badly enough to tie iOS Office to Office 365, it will pay Apple's 30%.
But he warned that the longer Microsoft holds out, the worse position it puts itself in. "The longer they go, the more they train users to do without Office on the iPad," Miller said. "Users will be de-conditioned, so Microsoft should move quickly."
Miller acknowledged that the picture is cloudy. "It's too hard to know one way or the other. There are all these moving parts," he said.
Meanwhile, the clock is ticking. Office 2013 and the new Office 365 subscription plans are likely to launch late next month or in early February, while Office for iOS is expected to debut in late February or early March.
Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is email@example.com.
- Apple to fix iOS 7 crash bug
- Apple rang up $10B in app sales in 2013
- Balky browsers tick off tablet owners
- iPhone, iPad dwarf mobile rivals in small- and mid-sized firms
- iOS 7 now powers 3 out of 4 Apple devices
- How to fix iOS 7 glitches
- After a week, iOS 7 runs more than half of Apple's mobile devices
- First look: The new iPhone 5S impresses
- iOS 7 off to speedy adoption start
- Amazon redesigns Kindle app for iOS 7, adds Collections
Read more about Mobile Apps in Computerworld's Mobile Apps Topic Center.
- 15 Non-Certified IT Skills Growing in Demand
- How 19 Tech Titans Target Healthcare
- Twitter Suffering From Growing Pains (and Facebook Comparisons)
- Agile Comes to Data Integration
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- Performance Management: The Mobile App Development Playbook This comprehensive 16 page Forrester Research, Inc. report, authored by Jeffrey Hammond, Forrester VP and Principal Analyst, details a number of valuable, commonly...
- New Problems Require Innovative Solutions The mobile market is expected to be worth $25 billion by 2015
- Getting Agnostic about Mobile Devices The idea of being able to interact with customers, prospects, and stay attuned to competitive pressures is not new, but the velocity at...
- HP HAVEn: See the big picture in Big Data HP HAVEn is the industry's first comprehensive, scalable, open, and secure platform for Big Data. Enterprises are drowning in a sea of data...
- Meg Whitman presents Unlocking IT with Big Data During this Web Event you will hear Meg Whitman, President and CEO, HP discuss HAVEn - the #1 Big Data platform, as well...
- The New Way to Work Knowledge Vault This Knowledge Vault focuses on how, in today's increasingly virtual world, it's more important than ever to engage deeply with employees, suppliers, partners,... All Mobile Apps White Papers | Webcasts