First, the iWork was free on the iCloud, and now it is free on the OS, too. But there is one vital component missing to the Apple’s software bundling value; What will iWork free on the new Macs?
The Apple’s iWork consists of Keynote, Pages, and Numbers. It is equivalent of the Microsoft’s word, Excel, and PowerPoint, respectively. Currently the Apple first party productivity suite trades for the entire of $60 on the Apple Mac App Store. With the suite free on both iOS and iCloud, there is a little reason for the Apple to keep selling the suite for the profit.
‘’Office is a gold standard and the iWork is a tiny fraction of the market,’’ fellow Fool Evan Niu clarified. With that said, the Apple might be better off using a mediocre suite as a tiny bonus to inspire the hardware sales, where the Apple makes majority of its Mac related revenue anyway.
The Apple’s iWork software, contributes a minor portion to the Apple’s business. On that note, it is very possible that a choice to bundle iWork on the Macs might give an outsized gain in the hardware revenue in spite of a loss in 1st party software revenue. The company has rationalized the benefits to make a move on the iOS. Is free iWork on the Mac next?
To explain the paltry importance of the Apple’s iWork suite, compare it with the Microsoft’s business division, its segment related to the retails of the Microsoft Office. In the most recent quarter of the company, the segment reported the operating profit of the $7.2 billion for the division. According to the Horace Dediu’s projections, the Apple’s 1st party software probably contributed only $3.6 billion in the revenue for the whole year of the 2012.
