Pages and iWork - any business rational?

Even though Pages is a useful application to many of us, I must admit that the business rational is still not clear to me.

It is not like Apple goes out and stresses the fact that Pages is different from MS Word as a sales argument. People coming to iWork's discussion forums are probably somewhat representative of potential customers, and the question about Word compatibility seems very important. Their perception, based on whatever information, is that this is something to replace MS Word - not to complement it. What functionality there is in Pages that singles it out as something in certain aspects much better and more attractive, hardly ever comes up.

So the conclusion is that most people want Word, but they want to pay less for it. This is of course a tricky situation for Apple's marketing department, as OpenOffice already is a 0 dollar simple version of Word. (It is also in some aspects more powerful than Word.) It is very difficult to compete with that price and still make money.

What remains for Apple is to produce a completely different product - completely different from the result of decades of evolution of word processors based on decades of customer requests.

They boldly discarded a lot of the outstanding features of AppleWorks, and instead went for something slick. The question is if it is slick enough to attract enough customers to make it a good business investment.