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Apple plays defense, Microsoft goes on offense in battle for iPhone customers

Gregg Keizer | June 17, 2013
iWork for iCloud, Office Mobile reveal rivals' different strategies as they both chase iPhone's millions

iWork for iCloud requires an 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.


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