Microsoft share price: Company could rake in up to $7bn from Office for iPad

on Mar 26, 2014
Updated: Apr 9, 2020
Listen, Wednesday, March 26: With only a day to Microsoft Corp’s (NASDAQ:MSFT) press event in San Francisco, analysts are trying to predict the impact of a potential launch of the Microsoft Office productivity suite for the iPad.

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Reports last week suggested that Microsoft’s chief executive officer Satya Nadella may reveal at the event that the company’s most important product would be finally coming to Apple Inc’s (NASDAQ:AAPL) popular tablet computer (Microsoft share price: Software giant to unveil Office for iPad next week?). These expectations provided a considerable boost to Microsoft’s share price, helping it break above $40 for the first time in 14 years.

In today’s trading Microsoft shares fell 0.7 percent to $40.05 as of 14:25 UTC. The company’s stock has gained about 7.7 percent so far this year.
According to analysts, a version of MS Office for the iPad will demonstrate the willingness of Microsoft’s new leader to break away from the traditional Microsoft model and steer the company in a new direction, possibly at the expense of Windows and the Surface tablet. Putting Office at the centre of a push to become a leading services company across a variety of platforms would be a ground-breaking strategy for the Redmond-based software giant.

Reuters quoted Daniel Ives, an analyst at FBR Capital Markets, as saying: “The fact that Nadella is going to pull the trigger (on Office) shows he’s not just an insider that’s going to continue the status quo. Right now, it’s a blank sheet of paper.”
From a financial standpoint, the impact of an iPad version of Office will depend on how many of the iPad users adopt the software, as well as how much Microsoft will be charging for the product. Barclays analyst Raimo Lenschow estimates that the company could generate anywhere between $840 million to $6.7 billion a year in revenue.

Nomura analyst Rick Sherlund has made a more cautious estimate, saying that the product would generate about $1 billion in revenue per year, as many potential users will already have corporate licenses that can be converted to the new product.
The rumoured Office for iPad is thought to comprise versions of Word, Excel, PowerPoint and OneNote, adapted for use on the Apple tablet.
**As of 14:48 UTC buy Microsoft shares at $39.99**
**As of 14:48 UTC sell Microsoft shares at $39.98**


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