When Apple announced last week that it would give away its iWork suite of apps away for free to new Mac and iOS users, the tech press collectively broke into thunderous applause and started writing Microsoft Office's obituary. That iWork could somehow be an actual threat to Office is ludicrous. But there is a lesson to be learned from Apple's strategy. And I hope Microsoft is paying attention.

I don't want to waste any time entertaining the iWork "threat." On the Mac, Apple's iWork apps range from very good (Keynote) to laughable (Numbers), and the iOS versions are even less full-featured. In a long line of erstwhile competitors to Office—WordPerfect, Lotus SmartSuite, OpenOffice and its many copycats, and of course Google Docs among them—iWork doesn't even rate, and it's support of Apple platforms only of course relegates them to also-ran status. (And no, iWork on the web doesn't change that.)

Microsoft's Frank Shaw did a wonderful job of debunking this silly notion. But this post isn't about whether iWork is/isn't a threat. It's about what Microsoft can and should learn from this little episode.

See, Apple didn't just take its existing iWork apps, upgrade them, and then give them away. (And this is the part that those cheering tech reporters obviously missed.) Instead, the firm dumbed down the Mac versions of the apps so that they were closer in functionality to the more limited iOS versions. They actually removed features. A ton of features.

So rather than launch a brave new counterstrike against Office, as many tech reporters claimed, Apple has in fact conceded the productivity application market to Microsoft. Or something. I don't really care.

What I do care about is that Microsoft is about to launch a type touch-first version of Office for Windows, iPad and Android tablet. These versions of Office will presumably offer functionality that is somewhere between the limited feature set in Office Mobile (Windows Phone, iPhone/iPod touch, Android handsets) and the full-featured Office versions the firm sells for Windows and Mac. I've made the argument in the past that this new type of Office could perhaps offer the functional level of Office Web Apps, which are excellent, but of course with offline support. We'll see.

What the iWork blunder shows us is that dumbing down Office—the "mainstream" Office of the future, i.e. the version for touch-based, full-sized devices—too much would be a mistake. That is, Office Touch (or whatever they call it) should be more like full Office than Office Mobile.

Common sense suggests that Microsoft will find the right balance. And for an early peek at what that balance can look like, just check out the OneNote app for Windows 8.x. It's excellent, full-featured, nicely optimized for touch, and offers an attractive and productive user experience. That app is a lot more like OneNote for desktop than like OneNote Mobile on Windows Phone, Android or iOS. It is a great example of how good an Office Touch could be.

Anyway, I hope Microsoft is paying attention to this iWork thing. No one wants to see them pull an iWork. And yes, that's what we're calling that now.

And you thought I didn't appreciate Apple's contributions to the industry. :)