Some analysts say that Microsoft could reap more than $1 billion a year if it sells versions of Office for iOS and Android. But Google's release of Quickoffice for iOS and Android will make sure that never happens.
Gerry Purdy, principal of MobileTrax, claims that Microsoft could get an additional $1.25 billion in revenue in the first year Microsoft releases iOS and Android versions of Office, and $6 billion in annual revenue by 2017. He arrives at that number for calculating that Microsoft would get $50 per copy of Office, and that 25% of all Android and iOS tablet users would buy a copy. Users would actually pay around $70 for Office, because Apple and Google Play take 30% cuts.
But Google has just announced that a version of its productivity suite Quickoffice will let Google Apps for Business users edit Word, Excel, and PowerPoint files, and save them in Google Drive. True, Quickoffice isn't as fully featured as Office for iOS and Android are likely to be. But still, it will be free for Google Apps for Business users, and that could seriously cut into potential sales of Office for mobile devices.
There's an even bigger reason that Purdy's revenue numbers are extremely over-inflated. It's unlikely Microsoft will sell standalone versions of Office for tablets. Microsoft is pushing a subscription-based version of Office, and would like to move away from selling perpetual licenses. The subscription version of Office lets you use it on multiple devices, for example, several desktop PCs, Macs, and Windows tablets. Increasingly, people own traditional Windows-based PCs along with iOS-based or Android-based tablets. It's unlikely that many people will want to buy an annual subscription to Office and then spend an additional $70 or more for a version for their tablet. The Quickoffice release makes it even more unlikely that people will pony up that $70.
More likely, if Microsoft releases a version of Office for iOS and Android, it will include them as part of a way to spur sales of subscription versions of Office. Those new sales of Office will certainly account for significant additional revenue, but nowhere near $6 billion a year.
Of course, there's a chance that Microsoft will decide to exclude iOS and Android versions of Office from its subscription service. But doing that would go against not just its subscription plans for Office, but for its vision of itself as in large part a services company. So I don't expect that to happen.