Apple Inc (NASDAQ:AAPL)’s management and business have established the company as one of the top marketers in the world. Their popularity is unmatched in today’s market. However, Apple is still not marketed in some major American stores, and their products still lack one major resource many customers want.
It has been rumored for quite some time that Microsoft Corporation (NASDAQ:MSFT) has been developing a solution for the missing link. Some people won’t buy Apple Inc. (NASDAQ:AAPL) products because they want a product like Microsoft Office that they are already accustomed to. Adam Holt, of Morgan Stanley, believes that Microsoft has abandoned approximately $2.5 billion/year by not developing a Microsoft Office Application for iOS products. Microsoft’s current revenues are nearly $74 billion/year. Considering Microsoft’s revenues only increased slightly over 5% last year, this $2.5 billion represents a 3.4% increase, which would be huge.
Apple Inc (NASDAQ:AAPL) would also benefit greatly from this deal as iPhones generate more revenue than any other company item. This $2.5 billion dollars of deserted cash by Microsoft only accounts for usage on iPads. Adam’s research showed that 30% of iPad users would buy a Microsoft Office application. The iPhone and iPod Touch would also have the application, and Apple Inc (NASDAQ:AAPL) would receive 30% of all sales from the App Store. Apple is already known for the cash it has available, but this move could only generate more. Aside from the 30% of App Store sales, Apple Inc (NASDAQ:AAPL) would undoubtedly sell more iDevices with Microsoft Office capabilities.
In 2012, Microsoft Office accounted for nearly 33% of Microsoft’s revenue, but iPads only accounted for approximately 21% of Apple’s revenues. iTunes and the App Store only accounted for 5.2% of the company’s revenues, but an acquisition of this capacity could certainly bump that percentage. Earnings Per Share (EPS) for Microsoft have risen steadily over the past decade from $.92 to $2.00. Apples have risen from $.1 to $44.15 in the same period of time. With Apple’s EPS rising 43,933% more than Microsoft’s in that period of time, Microsoft would seemingly get a better deal, although Apple shouldn’t turn down the opportunity.
On Valentine’s Day, news reports were received that Apple’s products would now be sold in Staples, Inc. (NASDAQ:SPLS)’ stores nationwide. Staples has sold Apple products internationally for quite a while, but never had reached an agreement in the United States. Regis Mulot, Staples’ senior vice president of global human resources, confirmed these reports with a tweet that read, “After Canada, #Apple products are coming to #Staples in US. Great news!” Although this tweet is now deleted, several other Staples, Inc. (NASDAQ:SPLS) employees tweeted similarly shortly after the meeting.
Without a single annual decline in revenues for the past decade, Staple’s revenues have increased 216%. EPS have increased 222% since 2003, from $.63 to $1.4. Apple, Microsoft, and Staple’s stocks have all decreased by 6.5%, 6.9%, and 14.1% respectively in the past year. If Microsoft does release an iOS compatible Microsoft Office application in the next year or two, even Best Buy Co., Inc. (NYSE:BBY) could benefit.