“We don’t call it an office suite. It’s not an office suite.”

— In 2006, Google CEO Eric Schmidt denies the company is planning an assault on Microsoft Office.

This is amusing–if only because Google insisted for so long that it doesn’t have designs on Microsoft’s core PC software business. Discussing Google Docs and the company’s other productivity offerings with ZDNet Asia, Dave Girouard, president of Google’s enterprise division, volunteered that most businesses will have the opportunity to “get rid of [Microsoft] Office if they chose to” in a year.

“We wouldn’t ask people to get rid of Microsoft Office and use Google Docs because it is not mature yet,” Girouard said. But once it is and Google’s finishes with the 30+ features and performance updates it has planned for the office suite in the next year, the company will no doubt ask just that.

And when Google (GOOG) does, what will happen to Microsoft (MSFT)? Not to worry, Redmond, there will still be a place for your Office business in Google’s new software-as-a-service empire. Said Girouard: “I don’t think Office will entirely disappear.”

[Image credit: Flickr/FF2D]

Although, I’m not quite certain why anyone would, given the prices.

The Microsoft Store charges $319.95 for Windows Vista Ultimate, an OS you can purchase from Amazon (AMZN) for $249.99. It charges $149.95 for Microsoft Office. You can find that at Amazon for substantially less, as well–$92.50. On Amazon, a full version of Microsoft Windows XP Home Edition with SP2 will set you back $179.99. At the Microsoft Store it will…well, actually, it seems you can’t buy it at the Microsoft Store. Go figure.

But if you could, you’d almost certainly pay a premium for it. So, really, why bother?

And beyond that, why bother to launch an overpriced online software store in the middle of a nasty recession?

In design, the device seems to borrow quite a bit from T-Mobile’s Sidekick, and its touchscreen GUI owes a thing or two to Apple’s (AAPL) iPhone. Which makes perfect sense, since that’s the device it’s clearly intended to compete with. The G1 will run on both 3G and Wi-Fi and be tethered to the T-Mobile (DT) network. It will come preloaded with a version of Amazon’s MP3 store and Android Market, an application store similar to Apple’s App Store. And it will support and sync with the broad spectrum of Google (GOOG) apps–Google Talk, Google Calendar, etc. Its browser is something the dev team refers to as Chrome-Lite, a mobile version of Google’s new Webkit-based Chrome browser.

Oddly, the G1 has no built-in video player. Odder still, it has just 1GB of memory. T-Mobile has helpfully outfitted it with a 1GB/month bandwidth cap, though.

The G1 supports PDFs and Microsoft Office documents as well. Email will be handled through Gmail; there is no Exchange support, though presumably, engineers developing for Android Market will fill that void in short order.

Oh, the device offers copy-and-paste functionality. Hear that Apple?

It will arrive at market Oct. 22. Price: a highly-subsidized $179.