January 23, 2006 12:01 PM PST

Apple's iWork emerges as rival to Microsoft Office

Corel bills its WordPerfect Office software as "the world's leading alternative to Microsoft Office." But when it comes to U.S. retail sales, Corel lost the No. 2 spot in 2005 to a somewhat unlikely competitor: Apple Computer's iWork.

According to market researcher NPD, Apple grabbed a 2.7 percent unit share, while Corel had a 1.6 percent share. Microsoft maintained its dominance with nearly 95 percent of unit sales.

Apple's share is particularly impressive considering that iWork runs only on Macs, which account for a small fraction of computers, said NPD analyst Chris Swenson. "Apple's success for iWork has been pretty surprising," he said.

Looking at the Mac platform alone, iWork accounted for 17.4 percent, compared to about 82 percent for Microsoft. "Apple's iWork didn't overtake Microsoft Office, but I think taking almost a fifth of the Mac Office Suite market away from an entrenched competitor such as Microsoft is quite an accomplishment," Swenson said.

Corel, meanwhile did see its unit sales of WordPerfect Office grow 6.1 percent year over year, but its dollar revenue from those products dropped by 0.7 percent, Swenson said. Swenson said his sense is that the products aren't getting much advertising inside retail stores.

"I think Corel has their work cut out for them," Swenson said.

Corel recently updated its WordPerfect Office program as well, while Microsoft is due to release a significant update, Office 12, later this year.

The iWork program is a relative newcomer to the Office scene, having debuted in January, 2005. Earlier this month, Apple updated iWork, enhancing the Pages word processor and Keynote layout program with improved table capabilities, but not adding a spreadsheet program as some had expected.

There had been reports, apparently incorrect, on some Apple enthusiast sites that sales of the initial iWork software had lagged.

"One rumor that can be put to rest is that iWork wasn't selling well," Swenson said.

For its part, Corel said that it has 10 to 15 times more sales than iWork when you add in other channels--such as commercial sales and sales through distributors--and that PC makers, including Dell, sometimes bundle WordPerfect Office on their new PCs.

"When you add all of them up we stand strong to our claim of being the leading alternative," said Richard Carriere, general manager of Corel's Office Productivity unit. That said, having a major presence at retailers is important, he added.

"It's a small fraction of the market, Carriere said, adding: "It's very important for showcasing our product and we are present in all the major outlets."

74 comments

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Thanks Apple...
...for filling the gap and sometimes outperforming competitors when they neglect and or abandon the Mac market. The lame excuse they often use is that the Mac marketshare is too small to support developmental cost. But if you have good products, Mac people will buy. Office for the Mac is profitable for Microsoft. What excuse did Corel have to abandon the Mac?
Posted by nmcphers (261 comments )
Reply Link Flag
iLife and office
Office is on track for another 5 years on the Mac, could it be that
Apple is now holding of further development for the Excel
replacement?

Just to please MS naturally and maybe not a bad business
decision but iWork really misses it.
Posted by Peter Bonte (316 comments )
Link Flag
Open Office
Since the report goes over sales it naturally won't include Open Office (or nearly to the significance to show up as a blip on the radar), but I wonder where it lies in the number of people using it in comparison.
Posted by dragonbite (452 comments )
Reply Link Flag
Simple
2.7 + 1.6 + 95 = 99.3

100-99.3 =.7% for OOL.

Sounds low, but makes statistical sense. :)
Posted by BlinkMM182 (63 comments )
Link Flag
Umm how?
Seriously. I've played around with Pages. Its complete and total ****. Keynote is another matter though.

Seriously I'd rather use open office then Pages.
Posted by Jonathan (832 comments )
Reply Link Flag
Try Pages Again ...
Pages is no competitor for Word. I've never used OpenOffice,
but if it is 70% of Word, then Pages does not compete directly
against that either.

However, for those new users, or users needing to get simple
elegant documents out quickly, in multiple natively supported
formats. You can't beat pages. You really can't.

As usual, Apples solution isn't going to be the norm. I don't
even think they were, or are, even trying to compete with MS
Office, Open Office, or Corel. Its evident in the applications.

But what I did see, was something far more realistic to the
common user, and an attempt to make the creation of
professional looking documents simple. Bottom-line, yep, it
would be more poplular, AND it will not supplant any of the
Office Suites that are out there.

But like many, I am totally in love with KeyNote (I sensed you
had a near similar experience), and I find myself using Pages
more, and more. Pages does not replace my use of other word
processing applications. It simply enhances my options. A lot.
Posted by Thomas, David (1947 comments )
Link Flag
Keynote
As you said.. it's probably Keynote that is driving sales. It did for
me. Keynote is superior to PowerPoint on so many levels. Pages
is nice, but it can't really compete with Word if you are
comparing the two. However, Pages is much better for images
and creative-type documents. Pages is more like Publisher than
word..and more compatible than Publisher (it blows Publisher
away). I this was Apple's intention; for Pages to be a Publisher
like application..and also for it to be used in the academic
setting (teachers).

For formal writing, Word is king... at least for now.
Posted by (96 comments )
Link Flag
Clean, fast, and functional
How is Pages total ****? The formatting pane displays the most
common things you're going to do when creating documents -
formatting for paragraph, character, and lists styles. It integrates
seamlessly w/other iLife apps (really easy to add images from
iPhoto). It supports any file format I throw at it (jpg, flash, pdf),
it saves out as Word and PDF (most common needed formats),
tables are easy to create and editing borders is much easier than
word w/auto selection of rows, columns, etc.

It's faster than Word, hasn't ever crashed on me (something I
can't say for any MS app I've ever used), and includes several
great usefult templates - again, something I can't say for MS.

So, exactly how is it total ****?
Posted by twarfel (2 comments )
Link Flag
Peaceful co-existence
Not all the sales of iWork are coming at the expense of MS
Office. iWork is substantially less ($79 vs $359) and has a more
personal/small business vs corporate target market. So some of
its sales are to people who wouldn't have bought Office anyway.
I would bet sales of Office have gone up, not down, even though
MS's share of the "Office" software market may have slightly
declined.
Posted by Lucky Lou (88 comments )
Reply Link Flag
I Don't Understand the Math
"Looking at the Mac platform alone, iWork accounted for 17.4 percent, compared to about 82 percent for Microsoft."

If the Mac has a 5% marketshare of the PC world and 17.4% of Macs have iWork, then iWork has a 1% share.

For the math to get to 2.7%, Macs would need to have made up 15.6% of all PCs that purchased an office-style productivity package. I guess not many Windows users are buying these packages.
Posted by regulator1956 (577 comments )
Reply Link Flag
Don't confuse installed base with software purchases
As you aluded to in the last part of your email, Apple owners
and PC owners do not buy software at a 1:1 ratio. As would be
expected, Apple owners, on average, are slightly more affluent,
and therefore tend to buy at a slightly greater rate.

Further, while Apple may have a low single-digit ratio in terms
of worldwide sales, the percetage of U.S. consumers that buy
Macs is higher than the worldwide ratio.

But these explanations only partially account for the ratio. The
main reason: While Apple iWork had a release year in 2005 (and
now another in 2006), Microsoft Office did not. Since most
software sales spike around the date of release, it stands to
reason that the ratio of Mac users that buy iWork will remain in
the 10-15% range, and won't dip significantly until the next
version of MS Office ships.
Posted by bobjohnson1972 (2 comments )
Link Flag
Apple users account for 18% of all software purchases
Not positive where I read that, but it could be an explanation for
the discrepancy in your math.
Posted by jwmoreland (48 comments )
Link Flag
Never confuse market-share with user-share!
They are not one in the same.
Posted by JuggerNaut (860 comments )
Link Flag
Well duh !
Checking the foloowing sys. requirments:
Windows® XP, Windows® 2000 (with SP4), Windows® 98 SE, or Windows® Server 2003
By what other means does Corel have to support mac users ? I would use it if available. iwork is starting to become the app of choice with mac users due to tight integration with all other iapps. Keynote simply rocks.Sorry, Keynote is a mac thing just as Wordperfect is to window users.
Posted by dmchose (3 comments )
Reply Link Flag
Sorry for the type o,s gammer & such
No way to edit after posting & laud is it bad ;-)
Posted by dmchose (3 comments )
Link Flag
WordPerfect
I would probably call myself a die hard WordPerfect user, but they make it very hard to stay that way. Unless I am absolutly forced to do so I will not switch to Microsoft Office. On the other hand swithcing to Open Office or even iWork (if I owned a Mac) probably would make me loose any sleep.

Corel is just screwing itself and I'm suprised they can't see it. Their new business plan is to lurk behind Microsoft with claims of document compatibility. WordPerfects doc conversion SUCKS. I have to use open office to covert most Word docs. I don't blame Corel for trying to be compatable with Microsoft Office docs, but what they need to do is untie themselves from the Windows platform and start trying to compete.

Truthfully I wouldn't be suprised if WordPerfect disappears in the next five years. Open Office is getting better their are other alternitives as well. The only major selling point for Corel anymore is Reveal Codes (which are great) and the law features. From what I read in law computing journals a lot of lawyers are leaving Corel for Office. I love WordPerfect, but I really think it's a dying program. Not because it's a bad program, but rather that the owners just don't care enought to make it great again. :(
Posted by System Tyrant (1453 comments )
Link Flag
iWork Can't be compaired to Office.
How can you try to compare iWork to Office they are not the same
thing. You might as well compare a baseball to a banana.
Where is the spreadsheet, word processor, e-mail in iWork? Pages
is not a replacement for Word so that leaves Keynote for
presentations as the only part that could be compared. People that
buy iWork do not buy it to replace Office only to add to the tool set
they have in their computer.
Posted by studiodave (6 comments )
Reply Link Flag
Re: iWork can't be compared to Office
More like comparing a banana to a plantain. Where is the word
processor? What do you think Pages is? We bought iWork to replace
MS Office and it's worked. I haven't opened Word in close to two
years and my clients use Word extensively. It does a fantastic job at
converting Word files. It's much better than Word in many respects.
Pages is simpler to use, isn't bogged down with loads of useless
features, bloat, and doesn't bold the entire document when I try
and bold one word - something Word always does and drives me
nuts.
Posted by twarfel (2 comments )
Link Flag
True, iWork is stable and secure unlike Office
The word processor in iWork is called Pages; Apple's email program is called Mail.
Posted by jeffnailen--2008 (17 comments )
Link Flag
NPD measures sales in stores ONLY
These figures come from people buying usually individual copies from their local store - Best Buy, Circuit City, or even the Apple store.

Mail order, Online sales, Sales direct from the manufacturer, or Bundled sales are not measured. According to NPD Dell sells no computers.

So these figures are essentially meaningless - unless you had to wait in line while someone bought a thousand copies of MS Office.
Posted by Ars Venture (11 comments )
Reply Link Flag
WRONG: NPD measures MORE than in-store sales
You obviously have never purchased and used NPD's data. NPD
*does* have data for online sales (from sites from amazon.com,
buy.com), mail order catalogs (like PC Connection, PC Mall - and
their online sites), and direct sales (from software vendors like
Symantec). In addition, they also have data from distributors
(such as Ingram Micro), and VARs (like software spectrum). And
far from ignoring Dell, they have a large consumer panel that
contains estimates for how much software people buy from Dell.
All of their data sources are listed on their website. While they
don't have w.w. estimates like IDC and Dataquest, NPD's data is
really the only way a software vendor can figure out how their
product is doing in the U.S. market.
Posted by jeffgreene2006 (1 comment )
Link Flag
Two Different Product Lines, Two Different Markets
In terms of Office Suites, I see only two legitimate competing options: Microsoft's MS Office and the open-source OpenOffice suite (including offspring such as NeoOffice). I'm not familiar with Corel's software, and I don't suspect too many people buy that. To be fair, Apple does have a competing software suite: AppleWorks 6. But to be honest, it is not up to par with MS Office, though it does have its uses and has certain functions not available anywhere else.

I do, however, own and use iWork (just upgraded to iWork '06). I also own and use Microsoft Office for Mac 2004 Professional. They both have their uses, and they almost never overlap. When I want to write an article, or an essay, I use MS Word (although I admit that OpenOffice is getting closer and closer to making a convert out of me). When I want to create a presentation, or an advertisement, implementing pictures from iPhoto, movies from iMovie, and soundbites from GarageBand, i use iWork. Apple's iWork suite is for exactly that: easy syncing and compatibility with other popular Apple software. Microsoft Office is, as the name implies, an office suite.

I'd much rather see the comparisons of MS Office to OpenOffice. Obviously, MS Office is still dominant, but I do believe the open-source movement has had some effect on the market shares. In the meantime, you can't compare Honda Accord sales figures with Dodge Viper sales figures, and you can't compare iWork to MS Office.
Posted by anassassinoftime (170 comments )
Reply Link Flag
I Use Both
I use both on my Mac. When I want to make my presentations pop or have an easier time at creting newsletters and better looking word processing documents, I use iWork instead of Office. I really only use Office for Excel and Access, but if Apple comes out with a spreadsheet/database program that has advanced features like Excel, I will dump Microsoft on my Mac completely.

By the way, iWork is compatable with Office.
Posted by jypeterson (181 comments )
Reply Link Flag
use both...
You mention that you use office for spreadsheet (Excel) and
Access. While Access is part of the office suite for Windows, it is
not carried over to the Mac.
Posted by pajja (4 comments )
Link Flag
Why not Pages?
There is an often-repeated assertion that Pages is not well suited
for long technical documents. Can someone explain to me why that
would be the case? It seems to be able to handle large docs, even
to combine them while preserving page numbers and styles; it can
do footnotes and headings; What exactly is it lacking? Why couldn't
you use it for a qualitative dissertation, say? I'm scratching my
head on this one.
Posted by KMarkP (1 comment )
Link Flag
Business is about profit
No company will ever switch from office because every desktop in the place runs XP-2000. If you have a Dell that costs 500$ and an Apple that costs 2000$
which one will a good business man/woman choose> Open office & office.
Posted by justinowen42 (4 comments )
Reply Link Flag
A *good* businessperson chooses lowest TCO
Good businesspeople look at total cost of ownership (TCO), considering all costs, over the life of the investment, not just superficial up-front initial purchase prices of the hardware machinesthat would be an extremely shallow analysis.

Every single TCO study that has ever been published by anyone has concluded that Mac systems have a much lower TCO than Windows systems, some studies have shown a difference on the order of multiples. One study in the mid-90's showed Windows systems cost 5 times more than equivalent Mac systems when all costs are considered. Wake up. Pay now or pay later.
Posted by jeffnailen--2008 (17 comments )
Link Flag
Please Stop with the False Costs of a Mac!
Can we say mini-mac with an Intel processor for 500.00?

You keep the Dell keyboards and monitor ... but I guess you want
to force yourself to think that it will cost 2000.00 to buy a Mac.

I high end iMac does not cost 2000.
Posted by Thomas, David (1947 comments )
Link Flag
iWork really counts as office program?
I had iWork trial here. It can be good for home users (not home
office even!) but it is a joke to call it "office".

There is a huge zealotry around, there are people who buys
everything Apple ships (aka mac users) so I would not trust this
story for making decisions.

Simplest example: There is no "revisions" built in iWork.
Posted by Ilgaz (573 comments )
Reply Link Flag
To be fair
Pages just released version 2.0, so it's not really a mature application yet. I've tried it too, and like the direction it's going.

But my take is that it is aimed more at designing brochures, magazine layouts, and that sort of thing more so than doing long documents.
Posted by R. U. Sirius (745 comments )
Link Flag
thebignoticeboard.com
i think that its about time. iWork is an excellent piece of software.
Posted by thebignoticeboard.com (23 comments )
Reply Link Flag
Definition of rival
# One who attempts to equal or surpass another, or who pursues the same object as another; a competitor.
# One that equals or almost equals another in a particular respect.

Perhaps if Apple had 50% of the PC market it could even start to attempt to equal...

2.7% of the market and you get a headline of "top rival"?

Do we just like to type the word 'apple' at CNET or what gives!
Posted by KsprayDad (375 comments )
Reply Link Flag
 

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