Microsoft Office and Apple's iPads: Money left on the table?

Putting Office exclusively on Windows tablets may be a costly mistake, says analyst

Microsoft's Steve Ballmer with Office for Surface

FORTUNE -- Two and a half billion dollars.

That's how much Morgan Stanley's Adam Holt estimates Microsoft (MSFT) may be leaving on the table by not offering a full version of its Office suite (Word, Excel, etc.) on Apple's (AAPL) iPads.

Here how he gets that number.

For starters he estimates that Microsoft probably sold fewer than 1 million Windows-based tablets last year and will be hard pressed to capture 10% of the tablet market this year -- especially with stalwart partners like Hewlett-Packard (HPQ) reportedly choosing Android over Windows 8 for its forthcoming mobile devices.

He also reports that three to four times as many Mac users (30-40%) install paid versions of Office on their machines as Windows PC users (10-15%) do -- a difference that feels too high unless he's not counting the discounted versions of Office Home edition that come bundled with new PCs.

Assuming a similar 30% attach rate in 2014 on roughly 200 million iPads at an average selling price of $60 comes to more than $2.5 billion in extra revenue per year, even after Apple takes its 30% cut off the top.

That's more than Holt forecasts Microsoft will make from selling software (Windows and Office) on all Windows-based tablets in 2014.

"The math is compelling," he concludes, "and may drive MSFT to move Office."

Posted in: Apple, iPad, Microsoft, Morgan Stanley, Office, Surface

• BYOD: What do mobile information workers want?

  Apple iPhones and -- surprise -- Windows tablets, according to a new Forrester survey

  FORTUNE: The graphic above comes from a survey of 9,766 so-called mobile information workers in 17 countries conducted last quarter by Forrester Research for its usual target audience: corporate chief information officers.

  One of the questions Forrester was trying to answer is whether the BYOD (bring your own device) trend -- a movement that has undermined the CIOs' MORE

  Philip Elmer-DeWitt - Feb 4, 2013 1:40 PM ET
  Posted in: Android, Apple, BYOD, Enterprise, Google, iPad, iPhone, Microsoft, Surface

• Chart of the day: Christmas messages from new tablets

  For what it's worth, iPad tweets outnumbered Kindle 7:1, Google Nexus 18:1, Surface 50:1

  FORTUNE -- I can't vouch for the accuracy of the information in this chart. The nominal source -- A.X. Ian --  describes himself on Twitter and other venues as "Purveyor of pseudo-random ideas. Information massage therapist. Always prolific, seldom profound."

  But the ratios square with other signs we've been seeing -- including store traffic -- and bode better MORE

  Philip Elmer-DeWitt - Dec 26, 2012 5:47 PM ET
  Posted in: Amazon, Apple, Google, iPad, Kindle, Microsoft, Nexus, Surface

• IPad vs. Surface: Let the tablet war begin

  Apple dominates tablet sales. Now Microsoft is going after the iPad head on.

  FORTUNE -- Apple and Microsoft's relationship has had more twists and turns than Liz and Dick's. The two have been bitter rivals, vital partners -- even coolly indifferent. Microsoft's new Surface tablet could change things again. Apple's iPad has some 55% of the market. Amazon (AMZN) and Google (GOOG) have largely offered cheaper alternatives to compete. But Microsoft MORE

  JP Mangalindan, Writer - Dec 14, 2012 5:00 AM ET
  Posted in: Apple, iPad, Microsoft, Surface, Tablets

• Interest in the Surface fell 53% after its price was announced

  Meanwhile, 44% of tablet shoppers plan to buy an iPad versus 24% for Kindle Fire

  FORTUNE -- Consumer preferences in one of this holiday's hottest categories -- tablet computers -- shifted pretty dramatically between the third and fourth quarters, according to a new survey of U.S. households with broadband access published Thursday by Parks Associates.

  Among its findings:

  For the first time, more U.S. broadband households plan to purchase a tablet for the holidays MORE

  Philip Elmer-DeWitt - Dec 13, 2012 5:10 PM ET
  Posted in: Amazon, Apple, Fire, iPad, iPad mini, Microsoft, Parks Associates, Surface

• 11 Apple iPads per hour vs. zero Microsoft Surface tablets

  A survey compared sales at an Apple Store and a Microsoft Store in the Mall of America

  FORTUNE -- On Saturday we posted side-by-side videos showing Black Friday shopping activity at an Apple Store and a Microsoft Store in Lone Tree, Colo. The videos left the impression that there was a lot less shopping going in the Microsoft Store.

  Thanks to Gene Munster's team at Piper Jaffray, we can support that impression MORE

  Philip Elmer-DeWitt - Nov 26, 2012 6:05 AM ET
  Posted in: Apple, iPad, Microsoft, Surface, Tablets

• Today in Tech: Is $329 too much for the iPad mini?

  Also: Microsoft's Surface tablet reviewed, and two reasons Facebook is turning things around.

  Microsoft dives deep to surface a hit [WIRED]

  This is a great device. It is a new thing, in a new space, and likely to confuse many of Microsoft's longtime customers. People will have problems with applications — especially when they encounter them online and are given an option by Internet Explorer to run them, only to discover this MORE

  JP Mangalindan, Writer - Oct 24, 2012 1:54 PM ET
  Posted in: Apple, Facebook, iPad, iPad mini, Microsoft, Surface

• In mobile, it's now a three-way race

  In just a few weeks' time, the three-way death match for the future of the mobile operating system has shifted dramatically. Here's where Apple, Google and Microsoft stand now.

  By Kevin Kelleher, contributor

  FORTUNE – In a world increasingly going mobile, platform is destiny. The operating system will determine who rules -- or at least who has a seat at a lavish feast. Whether manufacturing phones or tablets, selling mobile ads or MORE

  Jul 16, 2012 8:44 AM ET
  Posted in: Android, Apple, conferences, Developers, Google, iOS, Microsoft, mobile os, mobile platforms, Surface, Windows Phone 8

• Apple's iPad mini: The rumor mill kicks into high gear

  Get out the sandpaper. Apple is said to be manufacturing the tablet Steve Jobs trashed.

  FORTUNE -- Rumors that Apple (AAPL) was working on a smaller version of the iPad are nothing new. The Wall Street Journal reported back in February that Apple was testing such a thing and Daring Fireball's John Gruber gave his insider's view in an April podcast:

  "What I do know is that they have one in the MORE

  Philip Elmer-DeWitt - Jul 4, 2012 6:24 AM ET
  Posted in: Apple, Google, iPad, iPad mini, Kindle Fire, Microsoft, Nexus 7, Steve Jobs, Surface, Tablets

• Macalope v. Winotaur on the Microsoft Surface

  Two mythical beasts lock horns

  FORTUNE -- When it comes to puncturing bombast and anti-Apple FUD (fear, uncertainty and doubt), nobody is sharper than the Macalope, Macworld's longtime comic columnist. In Monday's post, the mythical beast and his old friend the Winotaur debated last week's event in which Microsoft (MSFT) unveiled its answer to Apple's (AAPL) iPad. An excerpt:

  MACALOPE: Hey, what's with not allowing anyone during the hands-on to actually, well, put MORE

  Philip Elmer-DeWitt - Jun 26, 2012 8:33 AM ET
  Posted in: Apple, iPad, Microsoft, Surface, Tablets