Microsoft Corporation (NASDAQ:MSFT) recently announced that CEO Satya Nadella will appear at a media event on March 27 in San Francisco. Ever since the announcement, there have been many reports speculating that the company could unveil the Microsoft Office suite for Apple’s iPad. As of now, there is no confirmation from the company side, but a report from Goldman Sachs on March 24, 2014 by analysts Heather Bellini, Shateel Alam and Justin Rowley believe that the speculations might have pushed the share prices up since the announcement.
A good move from Microsoft
According to the analysts, this might be the part of Microsoft’s devices and services strategy, and a change in focus to one of its best products, Office. Having a strategy that covers multiple platforms, that might be on Android some time in the future, could be a good move from the software giant, believe analysts.
A more “platform agnostic” approach is an impressive change in the strategy for Microsoft Corporation (NASDAQ:MSFT) considering some of the recent trends like weakness in the PC market and the rise of cloud apps. Such trends would not have been of any help to the company’s traditional Windows-focused strategy. Analysts estimate an iPad/Android Office product could have an impact of $2.1 billion on revenues.
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PC shipment decline could accelerate
Apart from benefiting the Office brand, the non-Windows version of Office could accelerate the decline in the PC market, which would further create pressure on Windows. In 2013, 167 million consumer PCs were shipped compared to 197 million in the year 2010. According to analysts, the primary factor responsible for the decline in PC shipments is the increasing popularity of tablets. So, if use of Office on PCs is one of the factors holding the market together, then Office on iPads/Android tablets could certainly accelerate the PC’s decline.
Earlier this month, Microsoft Corporation (NASDAQ:MSFT) announced a new Office 365 Personal, and altered the name of Office 365 Home Premium to simply Office 365 Home. Office 365 Personal supports online/offline one PC or Mac and one tablet while the Office 365 Home supports 5 PCs or Macs, but not tablets. If the company allows tablets on Office 365 Home, analysts believe, it would further impact the non-Windows tablets attach rate for Office 365.
Goldman Sachs has a Sell rating on Microsoft Corporation (NASDAQ:MSFT) with a 12 month price target of $29.