Is Apple pitching iWork against Microsoft Office?

When it comes to Apple’s iconic media events, the one thing that guarantees hype is new hardware. No matter what else is on the agenda, iPhones and iPads are the star attractions. Understandably, much of the other news interspersed between device unveilings is swept aside, perhaps given a whisper of coverage after the dust settles. For me, it is those tidbits I find tantalisingly mysterious, a mere breadcrumb hinting at a grander plan. Last week’s iPhone event was no different.

Prior to WWDC I’d have forgiven anyone for thinking iWork had been put out to pasture. With no desktop update since 2009, it’s fair to say the web app versions of Pages, Keynote, and Numbers came with more than a little intrigue. In a sense, Apple had just created its first multi-platform apps. Now, four months later, Apple has dropped another breadcrumb. All three iWork iOS apps are now free for purchasers of a new iOS 7 device — Apple’s strategy is beginning to come full circle with more than a little risk and reward.

Whilst Microsoft plays Checkers, Apple is playing Chess

Apple’s growth in the mobile device market can largely be attributed to its innate cool factor; like any fashion label, its name alone draws customers. Whilst that enviable desirability has earned the company record-breaking revenues, Tim Cook now wants a different customer entirely — enterprise users. To secure their custom he must change a derogatory perception of iOS; he must convince potential users that the platform is equally capable of creation and consumption, putting Microsoft firmly in the crosshairs. iWork is no longer a lowly pawn on Apple’s chess board — it has been queened.

The dominance of Microsoft Office in the enterprise, education, and workplace industries has been perpetuated by the ubiquity of, amongst others, the .doc file. Their monopolistic grip has affected the psyche of many users leading some to believe there are no compatible alternatives.

However, with Microsoft’s lethargic response to the Post-PC market an opportunity has arisen for the likes of Apple and Google to eradicate this misconception with their offerings. With iWork’s web and iOS apps, Apple has given those unaccustomed to iOS the opportunity to switch whilst being platform agnostic for little compatibility issues — all at no cost. With many users splitting their work and personal lives between iOS, Android, and Windows the ability to consolidate platforms may prove decisive.

Alongside iWork's new web apps, the entire suite can be accessed for free everywhere.

Alongside iWork’s new web apps, the entire suite can be accessed for free everywhere.

Office’s predominant marketing ploy is its “familiarity and compatibility”; now, for once, without a dedicated iPad app and a $100 annual subscription, it is Office languishing behind the new norm. Ultimately, Apple makes its money selling iPads & iPhones; Google through advertising revenue; and Microsoft is dependent upon software like Office. The emergence of iWork as a free, equally powerful alternative to one of Microsoft’s biggest earners should have alarm bells ringing in Redmond — especially with October’s looming iPad refresh.

iWork hasn’t been levied to accelerate Office’s decline — Microsoft’s mobile strategy is making a grand job of that — it has merely been positioned as the natural successor for refugees looking to make the switch.

Disupting Office risks disrupting the App Store

At the beginning of this article I said Apple’s iWork strategy was risk and reward. The benefits of making the suite free are clear for all to see, but what exactly are the risks? After all, Apple’s estimated $145bn in cash reserves only swells with each financial quarter, and the loss of iWork’s revenue is a mere drop in the ocean. However, there is one vital and often overlooked cog in the iOS platform that could stand to lose out — the developer community.

Who’s making the most money from app downloads? iOS, of course. Credit: Harry McCracken

One of the primary reasons developers choose iOS over Android is because of the willingness of users to pay for apps. Despite this disposition, the delicate balance with which the paid market operates is constantly under threat. Commerce on the App Store is like any other; customers apply the same scrutiny over price and quality in their search for value.

By offering powerful apps for free, Apple risks warping users’ perceptions of what they should and shouldn’t pay for potentially upsetting the established trading equilibrium. By making the iWork suite free, Apple may be able to reap the benefits of Microsoft’s seemingly imminent decline, but it risks playing with fire on its most important asset — developers and their ability to make a living.

A valid argument to the contrary of such risks could be that markets exist — and often thrive — even when iOS offers a bundled app out of the box, Reminders and Notes, for example. This microcosmic comparison seemingly held merit when I first considered it; however, it ignores the fact that there is valid reasons why such other markets exist, iOS’s bundled apps are lacklustre at best.

Pages, on the other hand, is a highly powerful word processor designed to be industry standard with its only abled peer being Office. To make a clear analogy it would be like Apple acquiring Omnifocus and giving it away for free; there would be no competition.

Yet, the productivity market hasn’t yet been condemned, it has an opportunity to take advantage of iOS 7 whilst iWork languishes in its current skin. No all users require the complexities offered by iWork, hence the success of Byword & iA Writer, and that market will remain. The App Store’s dynamism can overcome any threat to the paid market, but it’s the precedent Apple has set that concerns me; there are flaws beginning to emerge and iWork may widen the cracks.