Fortune’s Philip Elmer-DeWitt cites Morgan Stanley analyst Adam Holt estimating that Microsoft could be foregoing as much as two and a half billion dollars of revenue by refusing to offer a full version of its Office suite for the iPad, arguing that while Microsoft (probably with good reason) presumably fears that Office for iPad would likely doom its Surface tablet PC, the Surface so far is a slow-seller anyway. Elmer DeWitt notes that Holt reports three to four times as many Mac users (30-40%) installing paid versions of Office on their machines as Windows PC users (10-15%) do, a metric with some ambiguity attached depending upon whether discounted versions of Office Home edition that come bundled with new PCs are being factored-in.
Whatever, if Microsoft could sell Office to 30 percent of the roughly 200 million iPads at an average selling price of $60, Holt calculates that it would send more than $2.5 billion in extra revenue per year Microsoft-ward, even after Apple took its 30% Apple Store cut off the top – more than Holt forecasts Microsoft will realize selling software (Windows and Office) on all Windows-based tablets in 2014.
One flaw your editor sees in that reasoning is that at least at this point, antiicipating that even 30 percent of iPad users would be likely to buy Office were it available seems fanciful given the Apple tablet’s many serious shortcomings as a content creation platform that have nothing to do with whether Office is available or not. It remains to be seen how Microsoft’s Surface Pro is received by enterprise tablet users, and how the iPad’s uptake in that market is affected by the lack of Office support now that there’s an alternative tablet.
You can read Philip Elmer-DeWitt’s article here: