I've been yammering away at this subject for two years now. Sadly, most people in my line of work use Word and Excel so I spend plenty of time in those applications. With a massive installed based of iPads, I can't understand why Microsoft isn't already there. If they were holding back to try and give the Surface an advantage over the iPad, that didn't work very well.
Anyway, Steve Balmer is now cryptically saying it is coming. If so, I'm guessing you'll only get it with an Office 365 subscription, like the existing iPhone Word application. While I understand Microsoft is probably doing a smashing business with lawyers and accountants, I have to wonder how relevant Office is at this point with everyone else.