Apple's in-app purchase policy also applies to the Microsoft Office 365 subscription on the iPad.
Microsoft has just announced Office for the iPad at a press event in San Francisco. The event was special because for the first time, we heard newly-appointed CEO, Satya Nadella, speak in front of reporters and journalists.
By finally launching Office for iPad, Microsoft is showing us that the company is willing to break tradition. It's also a harbinger of things to come under the leadership of Nadella. One thing is certain though: Microsoft still knows how to make money.
iPad owners can still use Microsoft Office for free, but they can only view documents and worksheets. You will need an Office 365 subscription to edit stuff - that's worth $99.99 per year. But it looks like Microsoft is getting only 70 percent of the overall in-app purchase.
Apple confirmed to Re/code that Microsoft is paying the mandated 30 percent cut for each subscription, which means that Apple will be earning roughly $30 per Office 365 annual subscription.
In case you didn't know, Apple requires apps that sell in-app purchases to pay 30 percent of the overall revenue. The policy irked many companies including Amazon. That explains why users cannot purchase eBooks directly on iDevices, unlike on Android. It is, however, fair.
In the end, Microsoft is meeting a strong but waning demand for Microsoft Office on the iPad. Apple, meanwhile, is earning cash in the process. It is a win-win situation, really.
So, it is no wonder why Tim Cook congratulated Satya Nadella via Twitter for bringing Office to the iPad. The friendly Nadella also thanked Tim Cook, adding that he is excited to bring the magic of Microsoft's productivity suite to iPad users.