iWork for iCloud won't reach public beta until "later in the year," Rosner said, but he didn't breathe a word about what, if anything, the online apps would cost.
Gottheil said Apple would not look at iWork for iCloud as a revenue generator, not a direct one anyway, since the competition, Google Docs and Microsoft's Office Web Apps, are free. If Apple, as Gottheil expected, offers iWork for iCloud free of charge, the revenue opportunity would be in sales of its devices, as iCloud is pitched as a side benefit of owning an iPhone, iPad or Mac.
So why is Apple bothering, especially after many of its online efforts have been busts, like the little-used Ping, a social network add-on to iTunes, and MobileMe, whose 2008 debut was a disaster? Gottheil, who has regularly criticized Apple for poorly executed online initiatives or failures to keep up with rivals in Internet services, said it could be a defensive-offense strategy.
"All of the platforms, Apple, Google, Microsoft, are in constant conflict. They're all trying to build their own on-ramps [to customers] while putting road blocks on [rivals']," Gottheil said.
In other words, if Microsoft touts Office Web Apps as the solution for iPad owners who want productivity tools — something that the company's CEO Steve Ballmer did last year — iWork for iCloud could be seen as Apple's tit-for-tat response, both trying to hold on to their own customers and entice some of the opposition's.
There are other ways of reading the tea leaves. With Microsoft's hesitation to pull the trigger on native Office apps for the iPad, perhaps Apple saw an opening to further lock its customers — Gottheil described it as "putting road blocks on your own off-ramp" — into its own ecosystem before Microsoft made its move.
But it was Microsoft's mixed feelings about its online apps that Gottheil made central to his argument that, notwithstanding the seemingly insurmountable odds of denting its Office business, iWork for iCloud was a legitimate threat to Microsoft.
"Microsoft seems very ambivalent about Office on the Web," Gottheil said, pointing out that the company has done little to publicize Office Web Apps or that they're free to use. The ambivalence should not be a shock, since Microsoft loses an Office sale for every customer who realizes they can get by with the limited-function, limited-feature online versions of Word, Excel and PowerPoint.
But with PC sales lagging, tablets more than taking up the slack, and Microsoft's mobile strategy just getting off the ground, Apple has an opportunity. It can bang the drum about a free iWork for iCloud without risking much, since sales of iWork on OS X and iOS are a puny fraction of its revenue. Microsoft may hesitate to follow simply because Office provides such a big chunk of total revenue, 31% in the first quarter.
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