3. Microsoft is conceding a huge market In the years that have passed since the iPad was first introduced, a variety of alternatives have sprung up to fill the Microsoft Office void. Apple's iWorks apps (Pages, Numbers, and Keynote), and third-party apps such as DocsToGo and QuickOffice deliver a similar set of capabilities, and promise at least some degree of compatibility with Microsoft Office file formats.
None of those products offers the same comprehensive set of features as Microsoft Office, but they'll all get the job done. Many alternative apps also provide broader integration with the local file storage on the iPad, as well as third-party cloud storage services such as Box, Google Drive, Dropbox, and SugarSync.
As I said almost a year ago: "The bottom line is this--Microsoft's virtual monopoly of the PC market is fading. Even if it's wildly successful with smartphones and tablets it will never have a dominant share of the mobile market. Ignoring iOS and Android means leaving millions of users without Microsoft Office, and eroding the relevance of the Microsoft productivity suite."
To rephrase it from a more current perspective, Microsoft has a vested interest in maintaining and building the audience for Microsoft Office, but it is faced with a shifting tech landscape where traditional PCs--the purview of Microsoft Windows--are losing momentum. It needs to encourage customers to embrace the Office 365 subscription model, but there is less incentive to do so if users will still be forced to spend additional money to purchase a secondary office suite for their iOS or Android mobile device.
There are reports that Microsoft and Apple have been at odds over Apple's cut of app sales, or in-app purchases. If that's true, the statement by Ballmer might just be bravado--posturing in an effort to get Apple to negotiate.
The problem with that theory is that Apple doesn't need Microsoft or Microsoft Office. Microsoft, however, does need Apple--and it will be a huge mistake if Microsoft fails to deliver native apps for iOS.
Mr. Ballmer, working with Office via the browser on a mobile device is simply not good enough. Office for iOS is very necessary.