Why Microsoft Shouldn't Be Worried About Apple iWork

Yesterday, Apple  (NASDAQ: AAPL  ) had quite a busy day during its iPad event. Apple unveiled a slew of new products, starting with upgraded Retina MacBook Pros with the latest Intel chips inside. The latest Haswell processors bring much-improved battery life and dramatic improvements with integrated graphics, both of which are highly valued within the notebook market. 

Apple also took numerous opportunities to poke at Microsoft  (NASDAQ: MSFT  ) , undermining its rival's pricing strategy with software. Apple made OS X Mavericks and iWork free going forward, which could potentially threaten Windows and Office to some degree. This possible threat is greater for Windows, since the market is slowly moving to a world where consumers expect frequent and low-cost updates. Apple and Google are creating this precedent. It would take quite a long time to topple the Windows empire, if at all, but the possibility is there in the distant future.

With Office, Microsoft has little to worry about from Apple. Office's target market is the enterprise, where Apple has expressed little interest. iWork is very much a consumer productivity offering, so Microsoft can rest easy for now. Google, on the other hand, is targeting the enterprise, but the search giant also charges for its productivity suite.

In this segment of Tech Teardown, Erin Kennedy discusses Apple and Microsoft with Evan Niu, CFA.

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  • Report this Comment On October 24, 2013, at 8:40 AM, marv08 wrote:

    Hm, it certainly will not kill MS, far from it. But quite a few people found Google Docs good enough, and iWork is certainly more powerful than Google's product.

    Even worse for MS: there is no real MS Office for either of the two dominating "Post PC" platforms. A lot of "casual" MS Office users will learn on their mobile devices that they do not really need all of MS Office's capabilities, and even a lot of power users do not really use any of the features added throughout the last decade.

    "Post PC" devices are already outselling PCs and from 2014/2015 tablets alone will outsell PCs. No matter if I use an iOS or an Android tablet, I can create, edit and share MS Office compatible documents without paying a dime. Using some $10 app I can even access SharePoint and Lync servers from iOS and Android. None of that money goes to MS. At some point they should worry about that, especially since recent reports indicate that neither Windows Phone nor the Surface 2 are seeing a relevant increase in reception (and no, people in BRIC countries buying a Lumia 520/521 for $100 are not going to pay $100 annually for an Office subscription either).

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