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."

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