Microsoft shares hit 14-year high on Office for iPad rumours
Microsoft’s shares scaled levels last seen in the dotcom boom following reports that the company plans to unveil an iPad version of its Office suite, potentially generating billions of dollars in revenue.
Microsoft chief executive Satya Nadella will unveil the iPad app at an event on 27 March. The event will be Nadella’s first major public appearance since his appointment last month.
Microsoft shares rose as much as 5% to $39.90 on Tuesday, adding $15 billion to the company’s market value. At that price, the stock was up about 10% since the announcement of Nadella’s appointment on 4 February. The shares last touched $40 in July 2000.
Analysts said the lack of an Office version for the iPad may have robbed Microsoft of billions of dollars in revenue. “We estimate that if 10% of the iPad install base were to subscribe to Office then this could add 15 million subscribers and generate $1.1 billion to $1.5 billion in consumer Office subscription revenue per year,” Bernstein Research analyst Mark Moerdler said in a note.
Investors have for years urged Microsoft to adapt Office, its most profitable product, for iOS and Android devices, rather than shackling it to Windows as PC sales decline.
Microsoft’s productivity tools remain the industry standard in businesses, but employees are increasingly using smartphone and tablets to supplement their work.
Tired of waiting for Office to be optimised for their touchscreen devices, a growing contingent of younger companies are turning to cheaper touch-friendly apps that can perform word processing and other tasks in the cloud.
Barclays analyst Raimo Lenschow said the plan to launch the iPad app would signal that Microsoft is moving towards a more serious cross-platform strategy.
Bernstein’s Moerdler said he did not believe that the app would have any significant positive or negative impact on Microsoft’s Windows franchise as most corporate customers use Windows.
Google has been making inroads into Microsoft’s Office software business with its free Google Drive application, which includes spreadsheets, presentation and word-processing tools.
Last year, Apple offered free updates for life on its iWork business software, which includes rival applications to Microsoft’s Excel, Word and PowerPoint, for Mac computers and iPad.