Microsoft losing $2.5bn a year by holding back iPhone/iPad apps

News 15 Feb, 2013

Firm could bypass the App Store by offering Office 365 to tablets.

Microsoft has lost out on billions of dollars by failing to release an Office application dedicated to the iOS platform.

Adam Holt, an analyst at Morgan Stanley has calculated that the software giant could be making $2.5 billion a year via an Office for iPad app.

“Office on iPad could be a several billion dollar opportunity,” Holt wrote in a research note.

“While [Microsoft] has resisted offering a full version of Office for the iOS, the company may ultimately decide there is more upside with Office on iPads, particularly if Win tablets fall short of expectations.”

Holt noted that Microsoft's Surface RT is set to have sold between 900,000-1 million units in the fourth quarter. He predicted that Microsoft faces a difficult task to gain even a 10 per cent share of the tablet market in by the end of 2013.

“[Microsoft] may open up Office 365 to iOS/Android versus making the application native, which may limit the near-term revenue, but would skirt the payment to Apple [you wouldn't need to sell it through the App Store] and drive greater adoption of Office 365, which has significant long-term benefits,”

The release of an Office app for iPad could still happen, however. Holt noted that Microsoft actually sees a 3-4 time higher attach rate for paid Office on Macs compared to Windows.

“The math is compelling and may drive Microsoft to move Office,” he concluded.

Disqus - noscript

The problem is office on iOS would be difficult due to the walled garden way files cannot be shared between apps. If apple devices came with a memory card, or central area for user file storage it might work, but at present I can clearly see why MS have avoided it.

The "walled garden" individual file storage per app is the reason iOS just works and doesn't clog up to a snails pace like desktop OSs, and it's why the App Store is successful (hundreds can be installed without worrying about a performance hit). Individual files can be exchanged between apps if needed, but how many apps do you expect to edit an Excel spreadsheet with? The main thing is these kinds of apps can load amd edit files from most cloud services and share them via social/email.

QuickOffice for iPad has showed how this can work for some time. Which is now owned by Google so maybe this will elbow Microsoft into doing something. Interesting how the author feels the need to namedrop Android when it has nothing to do with it.

There's nothing special about the app store that makes it magically able to handle hundreds of installed app 'faster', and nothing about traditional desktop OS that makes installing apps 'slower'.

Read more about: