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Is Free iWork for iOS a Threat to Office?

Is Free iWork for iOS a Threat to Office?

No. Well, maybe.

Lost in all the excitement around Apple's iPhone 5C/5S announcement this week is news that the Cupertino consumer electronics giant will no longer charge for its iWork mobile productivity apps. Is this a serious threat to Microsoft's Office juggernaut?

"What you may not know is that iWork is now the best-selling mobile productivity apps on any platform," Apple CEO Tim Cook said earlier this week at the firm's iPhone announcement. That sounds impressive on the face of it, but of course Microsoft gives away Office Mobile, and that release is literally brand new on both Android and iOS as well.

I've used iWork many times throughout the years and it's a typical Apple product in that it's big on presentation and light on functionality. But it's also the type of thing that is perfectly adequate for the needs of most users, especially those that don't require Microsoft Office compatibility. This is perhaps a bigger audience than some would like to admit.

From Apple's perspective, iWork is super important because it gives its users a way to create content, not just consume it. This was a chip on Steves Jobs' shoulder and Cook's explicit mention of this fact this week is pretty much all you need to know. The message is clear: While some people may see iOS devices as toys, Apple does not.

Taken together with iMovie and iPhoto for iOS, "no other platform has apps like this," Mr. Cook said. And he's right, especially about those creativity titles. But in the past, iWork was hampered by the fact that it was a paid product. So effective immediately, Apple is going to bundle them free on any new iOS device, just like Microsoft provides Office for free on many new Windows 8 and all new Windows RT devices. (It's not clear to me how this impacts existing users. Do they still have to pay? It appears so.)

This announcement didn't register too highly on anyone's radar, but now that bloggers have written pretty much all they can about the iPhone 5C/5S, some are turning their attention to this and other lesser announcements. And the opinions are all over the place.

First, Crazy Town. CNNMoney reports that free iWork for iOS makes "Microsoft the biggest loser." "Apple iWork is the scariest foe that Microsoft Office has yet faced," the report notes. Um. That's a bit of stretch. Right?

Maybe not. The saner sounding Al Hilwa offers the following take. "The Office franchise is exposed to erosion as non-Windows mobile devices take productivity work away from Windows PCs and mobile devices," he writes in Geekwire. "Microsoft has to rethink its vision of the dominance of Windows in the mobile world and adjust to the reality that it will be at best one of several major players in future devices and will never have the control it did in the pre-touch era."

The issue? Consumers must pay $99.99 a year to access Word, Excel and PowerPoint apps on their iPhones or Android devices. And since those are the bigger platforms on mobile, i.e. mainstream computing, that's fewer people even considering Office.

Fair enough. People like me would—do—argue that Office 2013/Office 365/Office Web Apps are superior to what Apple offers, or to Google's Drive/Docs solution. But that doesn't negate the point made above, that these alternate solutions may be good enough.

This is a problem because Office is Microsoft's single biggest business. It made over $25 billion in revenues in its most recent fiscal year. And with Windows facing serious threats of its own—Android, Chrome OS and iPad/iOS—this would be a terrible time for Office to finally falter too.

I'm not 100 percent convinced that iWork is an Office killer. But as with my note about Chrome OS yesterday—see In New Attack on Windows, Chromebook Heads to Intel "Haswell" for the details—this is something Microsoft needs to take seriously. I will be keeping an eye on this as well.

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