Microsoft optimistic about Office making its way to iPhone

Speaking at the Web 2.0 Expo in San Francisco on Wednesday, Microsoft Business Division president Stephen Elop dropped hints to suggest the set of productivity applications was bound to turn up on the Apple handheld device sometime soon.

However, TechCrunch reports that Elop later hedged his remarks when interviewer Tim O’Reilly probed him over the comments, admitting that the software isn't ready quite yet and stating that hopefuls should "keep watching."

It's been over a year since Microsoft first expressed "confidence" in its ability deliver applications of value to iPhone users. At the time, Tom Gibbons, corporate vice president of the company's Specialized Devices and Applications Group, indicated to Fortune that Office applications were a natural choice.

"It's really important for us to understand what we can bring to the iPhone," he said. "To the extent that Mac Office customers have functionality that they need in that environment, we're actually in the process of trying to understand that now."

Although the iPhone ships with built-in support for viewing Office documents, users wishing to make changes to those documents have had few options prior to this week's announcement of Quickoffice, which will support editing (as well as creation of) Word and Excel documents when it's released later this month.

For its part, Microsoft is also likely eager to tap into the lucrative iPhone ecosystem made possible by the App Store. The Redmond-based software giant is already the largest Mac software developer outside of Apple, with its Mac Business Unit estimated to generate revenues in excess of $350 million and profits of over $200 million each year.

That said, Elop also noted Wednesday that Office has half a billion users worldwide, but only half of them actually pay for the software. Going forward, the company says it plans to launch an ad-supported version of Office that will run as a Web app in most browsers.