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Apple plays defense, Microsoft goes on offense in battle for iPhone customers
- — 16 June, 2013 21:53
Rivals Apple and Microsoft bookended the week by revealing productivity tools aimed at the same pool of customers: The millions who own Apple's iPhone.
On Monday, Apple unveiled iWork for iCloud, a trio of Web apps that run in a browser on OS X, Windows and iOS -- and while not explicitly supported, likely even Android via Chrome -- and allow document creation and editing on all of a user's devices. They are the iWork apps Pages, Numbers and Keynote already available as native applications on OS X and iOS, but ported to the Web.
The last day of the workweek, Microsoft unleashed Office Mobile for iPhone. The app, which features Word, Excel and PowerPoint document viewing alongside some elementary editing, is written for the iPhone, but users can run the app on Retina-equipped iPads and the iPad Mini if they can stomach the real-size-of-the-iPhone display or a 2X-expanded look, the two options the iPad gives native iPhone apps.
iWork for iCloud won't reach a public beta phrase until this fall, while Office Mobile was good to go on Friday. Apple's not said whether -- and if so, how much -- it will charge for iWork for iCloud. Microsoft's tied Office Mobile to an active Office 365 account, which costs $99 annually for consumers and more than that for each business user. No Office 365 subscription, no Office Mobile.
The two releases in the span of five days caught the attention of one analyst. "I found the timing very interesting," said Bob O'Donnell of IDC in a Friday interview. "In the same week that Apple announced iWork for iCloud, which is a pretty credible threat to Office on the iPad and iPhone, Microsoft does this."
The launch of Office Mobile did come as a surprise: Previous reports had pegged a fall 2014 launch for Office, albeit for both iPhone and iPad. The suddenness made it easy to interpret as a rushed response to iWork for iCloud.
But the lead time required to get an app approved by Apple for the App Store makes it more likely that it was coincidental. In fact, Apple, not Microsoft, may have been the one that made a last-minute decision. Reports have had Microsoft haggling with Apple for months over terms of the latter's cut for Office 365 subscriptions purchased within the iOS app, and Apple would certainly have known of the timeline for Office Mobile's launch in the App Store.
Timing aside, the two initiatives take very different tacks. While iWork for iCloud appears to be part of Apple's long-running strategy to keep its users within its own ecosystem, Microsoft's is an attempt to tap into the iOS market and make some of them paying customers.
iWork for iCloud requires an iCloud.com account, something only available to people who own an OS X or iOS device. In other words, Apple isn't expecting to entice Windows-only users into joining the fold simply because iWork for iCloud exists.
What it is doing, broadly speaking, is playing defense. Its proposed tools may be "good enough" to keep its customer base from adding to its rival's coffers. Whether its customers have a Windows PC or not, iWork for iCloud could convince casual productivity users that they don't need Microsoft Office.
It's smart when one remembers that customers, even Apple's vaunted spendthrifts, have a finite amount of dollars. It's a zero-sum game: Money spent with Microsoft is that much less left to spend with Apple.
Not everyone sees iWork for iCloud that way; some believe Apple's strategy has at least some elements of offense in that it wants revenue, too.
While Ezra Gottheil, an analyst with Technology Business Research, thought last week that the Web apps would necessarily be free to use, if only to compete with Google's Docs and Microsoft's Office Web Apps -- more on the latter, later -- Wes Miller of Directions on Microsoft said that Apple would mimic Microsoft and offer iWork for iCloud only to customers who purchased one of the locally-installed iOS apps or OS X applications. Those who bought Pages ($10 for iOS, $20 for OS X), for example, would be able to use the Pages Web app.
Meanwhile, Microsoft's Office Mobile is an offensive strike aimed at adding revenue to its Office division. Nothing says that clearer than the cost of entry: To use any feature, even document viewing, an Office 365 subscription is required, which commits the user to never-ending payments.
Microsoft isn't delusional enough to believe it can convince current iPhone or iPad owners to migrate to its own Windows Phone or Surface RT tablet. Yet, it doesn't need to steal customers to add to its bottom line if it can convince them to buy into the Office subscription concept.
(As some pundits have pointed out, sans a native iPad app, the strategy is half-hearted. Still, better than nothing.)
Which strategy, defense or offense, will win out?
Ironically, even though Apple is playing catch-up -- Microsoft has offered free Web-based apps for Word, Excel and PowerPoint since 2009 -- it has the most flexibility because it has the least at stake.
If iWork for iCloud ends up bring free to all iCloud account holders, as Gottheil suggested, and that affects iWork apps and applications -- which are supposed to be upgraded this fall -- Apple loses little because revenue from software sales is a pittance compared to what it brings in from hardware.
Microsoft could dampen any enthusiasm for iWork for iCloud by simply better publicizing its Office Web Apps, the limited-function, limited-feature online versions of Word, Excel and PowerPoint that have a four-year head start. They've been around long enough that many consumers don't even know they're there.
But it's unlikely Microsoft will play the Office Web Apps card; Microsoft loses an Office sale for every customer who realizes he or she can get by with the free online apps. That's even truer now that Microsoft has pitched Office Mobile to the iPhone. If it counters iWork for iCloud with Office Web Apps by talking up its offering, it risks opening users' eyes to the fact that they don't need Office 365 simply to view and edit documents on their Apple smartphones.
Even so, Office is a behemoth in business, where the iPhone has made impressive inroads. Apple, on the other hand, has a poor track record in online, with multiple failures, including a precursor to iWork for iCloud, the abandoned iWork.com. Add to that Apple's ambivalent attitude toward iWork -- the last time it updated the OS X version was in 2009 -- and the money's on Microsoft.
O'Donnell from IDC wasn't the only analyst to disagree. Gottheil, too, cast iWork for iCloud as a credible threat to Office on iPhone and iPad.
"Microsoft has to be worried about Office, not its enterprise [customers] but those who just buy it to be able to read Office file formats and create small documents," said Gottheil in an interview last week. "iWork for iCloud is a threat there."
Perhaps. But don't bet on it.
This article, Apple plays defense, Microsoft goes on offense in battle for iPhone customers, was originally published at Computerworld.com.
Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is email@example.com.
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