On Thursday, Microsoft Corporation (NASDAQ:MSFT) CEO Satya Nadella finally unveiled the long-awaited Office for iPad.  Sterne Agee analysts say the launch of the company’s popular productivity on iOS devices is “a punch in the jaw” for Microsoft’s Surface tablets. However, they still see it as a “short-term net positive” for Microsoft stock. Apple Inc. (NASDAQ:AAPL) CEO Tim Cook even tweeted a welcome to Office.

Microsoft Office for iPad

Microsoft showcases Office ergonomics

When Nadella showed off Office for the iPad, he showcased how iPad users will find the same experience on their tablet as they do on all other devices. He also demonstrated how they have made the software’s design ergonomic in terms of use on tablets. In order to create a truly ergonomic experience, Microsoft Corporation (NASDAQ:MSFT) has smartly utilized the interfaces which have been designed specifically for mobile devices. The company basically made Office work well through those interfaces without requiring a keyboard or mouse.

In a research note dated March 28, 2014, Sterne Agee analysts Robert Breza and Jean-Baptiste Jouve say they think Office for iOS will probably be a top seller. They also note that it will boost awareness of Microsoft Corporation (NASDAQ:MSFT)’s Office software. They estimate that the app will increase the Microsoft’s licensing revenue by approximately $600 million per quarter.

However, they reaffirmed their Neutral rating and $40 a share price target because Microsoft Corporation (NASDAQ:MSFT) is still in a transitional phase.

Microsoft focuses on cloud

In his presentation, Nadella closed with remarks on how the company’s strategic focus will remain on cloud storage and file sharing. Indeed, the release of Office on the iPad does suggest that Microsoft Corporation (NASDAQ:MSFT) may be shifting its focus away from consumer devices, a market in which it has not been successful.

The company has basically taken away the one thing which differentiated the Surface tablet from other tablets, but nonetheless, Wall Street has largely seen this as a positive move because of how unpopular the Surface has been.

Office for iPad not as productive as on desktop

The Sterne Agee team notes that we can’t expect Office for iPad to be just as productive as Office for desktop computers, which can have a keyboard along with multiple screens. However, they suggest that it will “satisfy knowledge workers on the go who want access to their familiar work environment without carrying a laptop with the convenience and appeal of their favorite tablet.”

The analysts said they would test out Office for iPad themselves before making a judgment on the app, but they suspect it will be one of the top sellers in the App Store. They’re assuming that 40% of 10 million “knowledge workers” out of the 14 million who purchased an iPad in the last quarter will adopt the app, and they suggest that the number could even be conservative. However, this number adds up to about $600 million in revenue per quarter, although they say this will be “partially shadowed” because of difficult  margins.