Will Numbers add up for iWork '08?

Computerworld - Ten years ago, Microsoft Corp. strongly considered discontinuing Office for the Mac. Apple Inc. had its own competing AppleWorks office software. But the move still would have dealt a crippling blow to Apple, whose recently returned leader Steve Jobs had yet to conjure up the original, chubby iMac that started Apple's turnaround.

Instead, Microsoft said it would prop up its struggling rival, investing $150 million and promising to keep releasing new versions of Office for the Mac.

Times change. Apple is in the midst of a nearly decade-long upswing. It now sells one of every seven laptops purchased by U.S. consumers.

But the sword of Damocles that is Office continues to hang over the Mac. Every closely watched delay in Office 2008 revives some fear among Mac fans about Microsoft's long-term commitment.

In an attempt to defuse that threat once and for all, Apple released a beefed-up iWork '08 this week.

Making the Numbers work

First launched in January 2005, iWork included just two components: a PowerPoint-like presentation maker called Keynote and a page layout/word processing application called Pages. Though Pages could display tables and columns, it could not open Excel spreadsheet files.

The lack of a spreadsheet, along with Office's general ubiquity, explain why iWork has made little headway against Office despite its $79 price -- about half that of the cheapest version of Office.

According to NPD Group Inc., iWork held just 16% of the Macintosh office software market as measured by copies sold in retail and e-commerce stores in the past 12 months in the U.S. Office held 84% of the Mac market. Moreover, revenue from Mac Office sales has grown at an average annual rate of 73% in each of the past five years.

"The fact of the matter is that most everyone that has been switching to the Mac has been buying Microsoft Office," said Chris Swenson, an NPD analyst.

But with its third version of iWork, Apple has belatedly rounded out the suite with a long-rumored spreadsheet app called Numbers.

With it, Apple hopes to finally catch up to Office on its home turf, while "creating an insurance policy" should Microsoft ever decide that hurting iMac sales by retiring Office would outweigh Office's booming Mac sales, Swenson said.

The updated suite also has its release timing -- the back-to-school season -- going for it. Office 2008 for the Mac, meanwhile, is now scheduled to be out next January, missing not only the back-to-school market but Christmas.

What works (for the right price)

Apple claims that iWorks '08 can also open and save all Microsoft Office documents, including the new XML-based ones created by Office 2007 and the future Office 2008.