Microsoft Corporation (MSFT)’s Sneaky Apple Inc. (AAPL) Attack

Users of Apple Inc. (NASDAQ:AAPL)‘s iOS have long been clamoring for a version of Microsoft Corporation (NASDAQ:MSFT) Office that would allow them to operate simultaneously within the leading productivity software suite and the leading mobile ecosystem. Mr. Softy recently announced the release of an iOS app that will bring Office to the Apple Inc. (NASDAQ:AAPL) ecosystem, but only to a very tiny corner of it. The app will be available only to Office 365 subscribers and only as an iPhone app; the iPad won’t be given the chance to cannibalize sales of Windows tablets by allowing users to use Office in the larger environment.

More business for 365
The availability of Office in the iOS environment may be the final catalyst needed to get users of the top productivity suite to switch from the classic software-based version to the cloud-based version, Microsoft Office 365. While the company makes slightly less on the software “out of the box” — Office 365 is slightly cheaper at $99 than the $140 for the classic version — but the Office 365 price must be paid annually. The recurring subscription income for Office will quickly make Office 365 more profitable for Microsoft Corporation (NASDAQ:MSFT), adding revenue to what is already its largest source of income.

It’s hard to imagine that the ability to make minor edits to documents and spreadsheets on your iPhone will attract a huge throng of new users, but pushing existing customers toward the cloud will be good for Microsoft. Additionally, the nod toward iOS may be just enough to remind Apple Inc. (NASDAQ:AAPL) users of how much better — or at least ahead — Office is compared with its competition. Google Inc (NASDAQ:GOOG) Docs has mounted a challenge but is still not the preferred choice of business. Apple Inc. (NASDAQ:AAPL) also threw its hat in the ring with iWork for iCloud, but Cupertino is playing catch-up in this arena.

The tablet wars
The one area that any version of Office will be noticeably missing is on any tablet platform other than Windows. Neither Google Inc (NASDAQ:GOOG) Android tablets, nor any iPad will get an app to run the mobile version of Office. With Microsoft Corporation (NASDAQ:MSFT) still attempting to make a more serious push into the tablet realm, particularly as tablets become an increasingly common tool for enterprise users, the threat to other efforts that putting Office Mobile on the iPad would represent would have been too significant. Certainly, the lack of an iPad version greatly limits the usefulness of the iOS version, but Microsoft investors should be encouraged that the company is defending its turf.