There have been approximately 60 million iPads sold to date, and Apple expects to sell its 100 millionth iPad later this year. What if Microsoft did in tablets what it did in the personal computer arena? Remember that Microsoft was not always a producer of operating systems. In fact, Microsoft made the majority of its early money by selling Office on the Mac. Microsoft wanted an operating system so that it could sell its Office software. Why wouldn’t they follow a similar strategy now?
Let’s suppose that Microsoft made Powerpoint, Excel, and Word all available for the iPad. I would guess that Microsoft would be able to sell each at between $15-$25. I arrive at this number because Apple sells its productivity apps for $10. Microsoft has greater brand recognition and loyalty. People would probably be willing to pay more for an Office app. Let’s say that on average 65% of iPad users will buy the full suite and the remainder will buy something else.
100 million x 65% = 65 million
65 million x (15 + 15 + 15) = 2,925 million
In other words, Microsoft could have made somewhere around 3 billion dollars in revenue over two years on offering these three Office apps for the iPad alone (and I haven’t even considered smart phones or other tablets). Also, it would have established Microsoft as the standard for productivity software on tablets just the same way it did for PCs 20 years ago.