iWork by the Numbers: No Threat to Microsoft. Maybe. [UPDATED]

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Microsoft earns nearly a billion dollars each year on MS Office sales to Macintosh customers. It commands 91 percent of the Mac market for that product category. iWork, on the other hand, has about 9 percent of that market. As a result, even the addition of Numbers is unlikely to affect Microsoft, yet the cold-war-like game between Apple and Microsoft remains convoluted, and now Google has inserted itself into that war, according to Business Week on Thursday.

There was a time when Apple needed Microsoftis benevolence to survive as a company. Some felt that Appleis movement into an "Office" competitor with iWork was a risky affair, a statement that Apple no longer needed Microsoft. Yet one undeniable fact has remained. Microsoft makes an enormous amount of money from MS Office on the Mac.

Despite that, the situation for Microsoft software on the Mac is looking worse and worse. Office 2008 for Mac is seriously delayed. Gone is Virtual PC. (However, with good reason.) Gone is MS Explorer for the Mac. Gone is the Windows Media Player. Microsoft appears to be backing away from a lucrative market just at the time when Appleis success is soaring, according to Arik Hesseldahl.

The question is, why does Microsoft seem so indifferent to the Apple market opportunities given Appleis success? On top of that, with Microsoftis total domination of Office on the Mac, one has to wonder why Apple bothers with its own suite. Perhaps itis only to punctuate the fact that customers do, in fact, have a choice. Perhaps Google could begin to play a role with its Google Apps, but that picture is not yet clear.

The convoluted relationship between Apple and Microsoft over the years hasnit changed much. What seems to be changing is the opportunities presented by Appleis success and how Microsoft seems to be pulling back and Google seems to be exploiting them. The cold war, in fact, continues.

[UPDATE: Mr. Hesseldahl appears to have adjusted the market share numbers after initial publication. I reiterated his updates.]

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