Microsoft explained its rationale in a blog post:
The new Office mobile app represents our vision for what a productivity solution would look like if first built for mobile devices. In designing this new experience, we first considered how people’s expectations differ when using a phone versus a computer, so we set out to optimize for simplicity, efficiency, and common mobile needs.
MS has released a video to announce the new app:
Office Mobile still works with the same Office documents that the separate apps do, but reduces the need to switch between apps and provides more efficient use of the device’s storage, as well. Office Mobile adds extensive camera support so you can perform tasks like snapping a photo of a document and turning it into an editable Word file, for example, or snapping a photo of a spreadsheet that you can then edit in Excel. Similarly, grab a whiteboard photo and edit it in PowerPoint.
The new preview is available for both Android and iOS users separately – while iOS users will need to have Apple’s TestFlight tool installed, anyone can download and use it for free. If you do have a Microsoft account, you’ll gain the ability to access files in the cloud, and you can sign in to multiple accounts if you keep your files in different places.
Microsoft is making Office Mobile available for public preview to iOS users. Microsoft notes that as per Apple’s TestFlight limitations, the public preview is capped at 10,000 users.