Sigh. More Bad Tech Reporting

| January 24, 2006, 04:41 PM

Sometimes I get totally ticked off about bad high-tech reporting and the feeding frenzy one story can generate.

Yesterday, CNET News.com ran an outrageous story suggesting that Apple's iWork had eclipsed Corel WordPerfect sales and that, according to the headline, "Apple's iWork emerges as rival to Microsoft Office.” Wrong on both assertions.

According to JupiterResearch surveys, based on usage, WordPerfect is No. 2, behind Microsoft Office in the consumer, SMB and enterprise markets (roughly 15 percent in each market). I can't speak for retail sales. CNET News.com used another analyst firm's retail data. My problem isn't with that other firm's data but how CNET News.com used it to make something out of absolutely nothing.

Here's why.

The data used to state CNET News.com's position is limited to a single sales channel. Corel launched a second WordPerfect Office 12 suite in 2005, putting greater emphasis on smaller businesses. Along with the repositioning, Corel widened the number of sales channels for WordPerfect Office. The software is available in many different channels, including retail, new PCs, online catalog stores like PC Connection and local resellers, among others. I wouldn't be shocked if WordPerfect sales shifted among those channels, but that isn't the same as a decrease in sales. Similarly, the story doesn't offer iWork sell-through data on these other channels, so there is little more than a partial sales comparison for the two products. I should note that Corel's sale to one customer--50,000 units to the US Justice Department--is, based on figures cite by CNET News.com, nearly as much as iWork retail sales for all of 2005.

Contrary to CNET News.com's position, iWork isn't an Office suite. It's even a stretch to call the software, which contains two programs, a Works package on par with Microsoft Works. Any iWork comparison to Microsoft Office or WordPerfect Office is an apples-to-oranges comparison, at best.

There's an obvious logic problem with the contention that iWork, which is only available for Macs, could somehow rival Microsoft Office. After all, various industry sources, including Apple, put the company's PC marketshare at less than 5 percent. JupiterResearch surveys show that more than 60 percent of consumers, the majority with Windows, run Office on their primary home PCs. Among businesses, Office usage tops 90 percent. Assuming that Windows is on 95 percent of PCs and Mac OS on another 5 percent, the iWork numbers don't add up. Even if every Mac user in that presumed 5 percent bought iWork, Office’s dominance on that other 95 percent would easily eclipse the upstart.

The better--but still not great--comparison is misleading, or, in news media parlance, leading. The CNET News.com story did compare retail sales of iWork to Office 2004; both are Mac products. But the story mistakenly treats iWork and Office retail sales like market share. There is nothing to indicate in the numbers revealed in the CNET News.com story to suggest that iWork snatched sales from Mac Office. The story also failed to provide historical retail sales data for Office and WordPerfect, which could have given more perspective on what impact iWork sales had, if any, on the other two products. The story also left out historical sales of AppleWorks, which iWork essentially replaced.

The story also fails to account for sales cycles. Retail software sales tend to be strongest the first couple months following a new release, declining thereafter. Corel launched WordPerfect Office 12 in April 2004. Additionally, vendors tend to reduce retail shipments of software ahead of the release of a new version, so as not to have too much inventory in the channel. New WordPerfect version X3 launched last week. It’s reasonable that Corel started reducing channel inventory in the last quarter ahead of the new product’s launch. Revealing would be January and February sales of WordPerfect Office X3.

Better reporting approach would have looked at retail sales of iWork with respect to Mac computer, Mac peripheral and iPod sales, as a means of assessing the extent of the so-called iPod halo effect. Instead, reporter Ina Fried took a quick hit approach that made too much out of the presented data.

I rally to Corel's defense because this CNET News.com story is spreading, across blogsites and other news sites. There was too much bad technology reporting in 2005. There's no reason 2006 has to be the same way.