updated 10:21 am EDT, Fri March 28, 2014
Microsoft sacrifices profits to reach iPad users
Apple is claiming a 30 percent cut of Office 365 subscriptions bought through Microsoft's Office for iPad, as usual at the App Store, an Apple spokesperson confirms. Although people can sign up for Office 365 outside of the iPad apps, a $100 in-app purchase provides a one-year plan. That suggests that Microsoft is sacrificing a significant amount of revenue to one of its rivals in order to attract iPad users.
The prospect of losing so much revenue is believed to have been one of the obstacles preventing Office from reaching the iPad sooner. Indeed, when Apple first began offering an in-app purchase system, many companies with subscription-based services -- such as magazines and newspapers -- resisted, either avoiding the App Store entirely or requiring people to subscribe via the web. Since then many have relented in order to capture the iOS market, but not all.