Office's Big Mac Sales

The number isn't just big. It has grown. In October, Mac Office was 20 percent of the suite's total retail sales—that's including the Windows product. The percentage increase is still growing.

"We expect it to continue to grow as long as Apple's share of the U.S. retail PC sales continues to increase—then sales of software for the Mac OS will continue to increase," said Michael Redmond, NPD's Software director.

NPD's figures are for revenue share, which pits Office 2008's three versions against more than a half dozen Office 2007—the Windows—version.

"Apple's [PC] unit share has basically doiubled over the last two years," Redmond said. "I think that's what's driving demand for the Mac Office suite."

Yesterday, Microsoft issued a press release about record Office 2008 sales compared to predecessor Office 2004.

"Three times the sales—our data actually reflects that," Redmond said.

But there are mitigating factors that artificially inflate version-to-version comparisons:

• The Mac install base was tiny four years ago compared to today, which skews comparisons.
• Microsoft offered major discounts for Office 2004 in the fourth quarter, with free or heavily discounted Office 2008 promised to buyers. So, Microsoft committed giving two Office licenses to v2004 buyers—with fulfillment of the second copy coming after Office 2008's January launch.

Unfortunately, NPD only tracks the initial sale, so Redmond couldn't say how many free or cheap Office 2008 licenses Microsoft shipped.

"It's all bundled together," he explained. "We don't break it out. It's one sale."

The validity of Microsoft's record sales claims doesn't change how important Mac Office has become for retail sales of the productivity suite.

"The bottom line: The success of the Mac is helping Microsoft with Office productivity suite sales," Redmond said.

Microsoft doesn't break out Mac Office sales, so there's no hard-fast number showing the suite's contribution to overall Office sales. I'll make a simple dollars-to-dollars analogy. What would the impact be if every $100 in Office sales was instead $75? Twenty-five percent less is a big number.

But the math isn't that simple, because there almost certainly is a symbiotic sales relationship between the products. How symbiotic is one of those chicken-and-egg questions. Would Mac sales be as great without Office? My guess: No. Like it or not, Office is the productivity suite of choice, and its demand among businesses large and small is undisputed. Consumers are more flexible about productivity suites, but many still demand Office. I'm convinced that Mac sales couldn't be as strong without Office.

Last week I downloaded OpenOffice 3.0 beta, the one with the Aquafied user interface. I'm a big fan of open-source software, but sadly I must say that OpenOffice is going Mac OS X with too little, too late. The UI and features feel dated compared to the more modern and more Mac-like—look at those floating palettes—Office 2008. Then there are those huge Office sales to consider. I'm not done testing OpenOffice 3.0 yet. I still have hope for the suite

That said, Microsoft's Mac success leaves little room for new productivity suite competitors, particularly with iWork as a compelling and lower-cost alternative.

Related Posts:

• Office 2008: Follow the Leader, Microsoft Watch, Jan. 3, 2008
• Office's Big Mac Sales, Microsoft Watch, Oct. 8, 2007
• Office 2008 More or Less, Microsoft Watch, Sept. 25, 2007
• Playing Apple's Numbers Game, Microsoft Watch, Aug. 7, 2007

Posted by Joe Wilcox on May 15, 2008 12:48 AM