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Apple's Free iWork Pressures Microsoft Office

Apple challenges Microsoft to release Office for the iPad by offering its iWork suite for free to new customers. How will Microsoft respond?
4. iWork for iOS could gnaw into Microsoft Office's PC business.

In an email, Gartner analyst Michael Silver said iWork "is mostly a consumer thing," but that "consumer choices bleed into the enterprise."

The implications stretch beyond tablets. Apple also produces iWork apps for OS X as well, and the company said at its Worldwide Developer Conference that new versions of both the mobile and desktops apps will be released later this year. If iWork becomes popular on iOS, it certainly can't hurt the popularity of iWork on MacBooks and iMacs.

But the bigger factor could be iWork for iCloud, which is currently in a free public beta. Apple hasn't confirmed whether the apps will remain free once iWork for iCloud officially launches, but the Web apps are nonetheless interesting because they're platform-agnostic. If a user begins working on a project on her iPad, she will be able to continue it seamlessly on a Windows PC, and vice versa. iWork will never replace Office in the enterprise, but that doesn't mean Office will continue to enjoy monopoly-level market share forever, especially among users who don't require the software's differentiating features.

5. iWork doesn't face a sure path to success.

Even if it's successful among iPad users, iWork won't necessarily rocket to tablet dominance. Johnson noted that factors such as iWork's mediocre compatibility with Office could be problematic; he said enterprises are "very clear" that such compatibility is essential.

It's also noteworthy that iWork apps have never been prohibitively expensive at $9.99 apiece. The apps' usage will certainly go up now that they're free, and with new versions coming, Apple might have compelling new features in store. But if iWork were going to silence demand for Office on the iPad, shouldn't it have already started to happen?

iWork additionally faces capable mobile competitors, such as QuickOffice Pro and OpenOffice, and Google is certainly advancing its own mobile productivity agenda with not only Android, but also Chromebooks. Windows tablets could also still rebound with faster, sleeker Windows 8.1 and Windows RT 8.1 models, many of which will come bundled with Microsoft Office, and some of which will cost less than iPads. And then there are emerging contenders such as Box, which just expanded its services to include cloud-based documentation creation. Free iWork downloads are an interesting addition to the fray, but with so many upstarts fighting to gain traction, don't be surprised if Office isn't dethroned any time soon.