Microsoft Is Losing $2.5 Billion a Year by NOT Being on iPad
Technology Editor, CNBC.com
Microsoft's pride may be costing it billions of dollars.
The tech giant may be missing out on about $2.5 billion in revenue by not offering its Office Suite — which includes Word, Excel, and PowerPoint — on Apple's iPad.
(Read More: Microsoft Surface Pro Gets Tough Early Reviews )
According to a recent note investors, Morgan Stanley analyst Adam Holt said he estimates that priced at $60, about 30 percent of iPad users would buy the software. With 200 million iPad users in 2014, Microsoft could generate $2.5 in revenue, and that is after it pays Apple a 30 percent App Store commission.
(Read More: When to Expect Apple iTV, iPhone 5S and Tablets: Analyst )
That's a nice chunk of revenue for the company. But so far Microsoft has been reluctant to offer a full version of its software suite on Apple's iOS because they are relying on their software to be something that entices consumers to buy the Surface tablets. Their strategy may not be paying off though, at least not yet.
"While MSFT has resisted offering a full version of Office for the iOS, the co. may ultimately decide there is more upside with Office on iPads, particularly if Win tablets fall short of expectations," Holt said in the note.
Holt also noted that while Microsoft new operating system Windows 8 gives the company potential for a new source of revenue growth, the limited availability of Windows touchscreen devices has slowed consumer demand at the same time the corporate upgrade cycle is slowing.
(Read More: Supply Shortage Sours Microsoft's Surface Pro Launch )