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Microsoft's hold out of Office program for iPad has them losing $2.5 billion

By Steven Mitchell,

Microsoft is blocking themselves out of billions by not releasing its Office products to Apple's iPad.

According to PCMag.com, if Microsoft made Office available to the newest line of iPads at $60 then Microsoft would add $1.3 billion in revenue. It the program was released to Apples whole lineup of tablets that number could rise to $2.5 billion.

Morgan Stanley’s Adam Holt believes that 30 percent of iPad users would purchase the Office programs. Apple would of course take 30 percent of sales for selling it on their App Store.

"Our conversations lead us to believe Microsoft will price for value with Office on the iOS and net 30 percent to Apple (which can be negotiated). Microsoft may get $50-70+ [per] Office unit," Holt wrote. "If Microsoft got 30 percent attach in one [year] at $60 [per] unit on the ~200M base it is $2.5B in [revenue], more than the total amount of software [revenue] we forecast for Microsoft (Office + Windows) from 11 percent tablet share in FY14. The math is compelling and may drive Microsoft to move Office."

There is no word on Microsoft bringing Office to the iPad. The Los Angeles Times believe that Microsoft could be waiting to make Office available to Apples iPad in hopes to make their new Surface tablet and other Windows 8 devices more appealing.

 
 

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