ADBE

  • Posted: 30 October 2010 05:21 PM

    I’m looking to determine what investors should expect from Adobe over the next couple of years. The company can ride the CS5 revenue rise for a little while longer, but what’s the future of boxed software makers in the era of handheld devices?

    Flash may not have the same growth prospects it did a year ago and Acrobat, while now a standard, will not fuel the levels of growth investors are apt to desire.

    Obviously there’s a built-in market for pro-level content creation products. But I’m wondering if a suitor needs to appear to provide shareholders with a satisfying return on their investment.

         
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    Posted: 30 October 2010 11:41 PM #1

    JMO…........... 

    Adobe has 10+ years of zero percent share price growth: Seems like a perfect fit for a Softie takeover. Adobe’s product line (aging heritage SW) even fits MS perfectly. Finally, a MS takeover would allow them to waste untold Billions maintaining the charade of Flash.

        JohnG

         
  • Posted: 30 October 2010 11:45 PM #2

    johnG - 31 October 2010 02:41 AM

    JMO…........... 

    Adobe has 10+ years of zero percent share price growth: Seems like a perfect fit for a Softie takeover. Adobe’s product line (aging heritage SW) even fits MS perfectly. Finally, a MS takeover would allow them to waste untold Billions maintaining the charade of Flash.

        JohnG

    That’s an interesting view. Adobe might be uniquely suited for Microsoft and vice versa. Either way, I don’t see a way around an eventual sale of the company to another big, boxed software enterprise.

         
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    Posted: 01 November 2010 11:20 AM #3

    johnG - 31 October 2010 02:41 AM

    Seems like a perfect fit for a Softie takeover.

    there’s times I wish TMO had the option of voting on posts. I’d have given this one a big +.

    Not that I agree with it wholeheartedly but the idea of equating Adobe and MS because they are both Big Boxed Software Companies (BBSC, can I copyright that?) pushing products with their roots in the last century is brilliant.

    Of course if Ballmer decided to sink millions into buying Adobe that would guarantee it would fail and disappear within a couple of years.

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  • Posted: 01 November 2010 12:03 PM #4

    Having software I rely on (CS) being owned by MS would give me night terrors.

    I’m not sure I get the criticism of Adobe having “last century” and “non-mobile” technology (outside of Flash). Someone has to make this content creation-ware so people can consume said content on their mobile-devices. Designers need bigger screens and bigger input devices to make stuff on, not smaller. And don’t get me started on the “cloud” pipe-dream. That’s as laughable as the “paperless office” nonsense.

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    Posted: 01 November 2010 12:13 PM #5

    DawnTreader - 30 October 2010 08:21 PM

    I’m looking to determine what investors should expect from Adobe over the next couple of years. The company can ride the CS5 revenue rise for a little while longer, but what’s the future of boxed software makers in the era of handheld devices?

    It’s actually pretty good because people need to write software and develop content for those handheld devices. Adobe will likely own the easiest cross-platform API (Flash) that can cover 90% of apps and deliver 100% of content. And given that Q3 in the US has Android with 43% of the smartphone market to iOS’s 26%, devices that will support the full mobile Flash experience are quickly outpacing those that do not (i.e. iPhones).

    Apple’s guarded platform strategy and attempted rejection of the cross-platform technologies only works when Apple’s market share remains above a certain threshold, probably 20%. Below that, why does anyone want to incur the expense of developing twice? Welcome to 1994.

         
  • Posted: 01 November 2010 12:36 PM #6

    Bosco (Brad Hutchings) - 01 November 2010 03:13 PM
    DawnTreader - 30 October 2010 08:21 PM

    I’m looking to determine what investors should expect from Adobe over the next couple of years. The company can ride the CS5 revenue rise for a little while longer, but what’s the future of boxed software makers in the era of handheld devices?

    It’s actually pretty good because people need to write software and develop content for those handheld devices. Adobe will likely own the easiest cross-platform API (Flash) that can cover 90% of apps and deliver 100% of content. And given that Q3 in the US has Android with 43% of the smartphone market to iOS’s 26%, devices that will support the full mobile Flash experience are quickly outpacing those that do not (i.e. iPhones).

    Apple’s guarded platform strategy and attempted rejection of the cross-platform technologies only works when Apple’s market share remains above a certain threshold, probably 20%. Below that, why does anyone want to incur the expense of developing twice? Welcome to 1994.

    Brad:

    I appreciate your enthusiasm for the Android platform. Adobe’s share price is below where it was five years ago.

    The company saw a fall off in revenue and earnings last fiscal year. While Adobe will benefit this fiscal year from the sales of CS5, what’s to follow?

    Sure smartphone developers might purchase Flash, but is that enough sales volume and earnings potential to keep the company independent? At some point shareholders will demand a reasonable return on their investment.

         
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    Posted: 01 November 2010 12:56 PM #7

    While I think flash has missed it’s oppritunity with ultra mobile, I believe Adobe will retool their IDE and provide great support for web developers with HTML 5 and webkit capturing the cross platform RIA.  There are plenty of opportunities for both Web apps and platform specific apps, short term the platform specific apps will win out, and HTML 5 will provide cross platform support.  Flash video will die a slow death as the HTML based video gathers steam.  As far as Adobe they still produce best of breed tools and so until something better comes along I would expect creative folks to keep paying the toll.  The stock has under performed lately, but I have maintained a position.

         
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    Posted: 01 November 2010 12:58 PM #8

    DawnTreader - 01 November 2010 03:36 PM

    Sure smartphone developers might purchase Flash, but is that enough sales volume and earnings potential to keep the company independent? At some point shareholders will demand a reasonable return on their investment.

    Who knows? That’s for people who bet on stocks to decide. But their business model is very clear now, and that is to own the primary APIs for developing software and content for the client-side of mobile. There are some scalable server-side plays and publishing process plays as well, but their big bet is on client-side APIs. That’s also consistent with embracing HTML5, which is a fragmented mess right now, and will continue to be for a few years. Write-once-deploy-many tools just for HTML5—dealing with all the Chrome, Safari, and IE9 proprietary extensions—will be a lucrative market for them that smaller players won’t easily touch.

    Seriously, and you all know what I think of Steve Jobs… He was right to fear that Adobe would win the API battle, and win it quickly. Where Jobs screwed up was in thinking he could do anything about it. He exacerbated the problem by setting policies squarely against the interests of developers and customers. In doing so, he added fuel to the Android firestorm at just the right time, well, wrong time if you’re Steve Jobs.

         
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    Posted: 01 November 2010 01:10 PM #9

    Bosco (Brad Hutchings) - 01 November 2010 03:13 PM
    DawnTreader - 30 October 2010 08:21 PM

    I’m looking to determine what investors should expect from Adobe over the next couple of years. The company can ride the CS5 revenue rise for a little while longer, but what’s the future of boxed software makers in the era of handheld devices?

    It’s actually pretty good because people need to write software and develop content for those handheld devices. Adobe will likely own the easiest cross-platform API (Flash) that can cover 90% of apps and deliver 100% of content. And given that Q3 in the US has Android with 43% of the smartphone market to iOS’s 26%, devices that will support the full mobile Flash experience are quickly outpacing those that do not (i.e. iPhones).

    Apple’s guarded platform strategy and attempted rejection of the cross-platform technologies only works when Apple’s market share remains above a certain threshold, probably 20%. Below that, why does anyone want to incur the expense of developing twice? Welcome to 1994.

    Brad I recognize your love for hyperbola but you paint the picture as if the market is only smart-phone and the US.  As a developer, I would hope you still don’t think the world is flat as their is great opportunity across the Atlantic and Pacific ocean and with modern broadband and things like the Apple store you can market your wares at the speed of light.  As far as your metric, you must watch how you use statistics.  The market for a developer hardly consists of one quarter of sales in the US.  Do you have any statistics on the number of devices which support the full web experience?  According to this post at Mashable 17 days ago

    Flash 10.1 has officially surpassed the 1-million-downloads mark for Android smartphones, according to information we?ve just received from Adobe.

    I seem to remember SJ talking about 120M iOS (non flash)  devices.  So quickly outpacing seems a bit of a stretch even for you.

         
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    Posted: 01 November 2010 01:21 PM #10

    Pats, have you ever heard of Adobe AIR? It even reaches those 120M iOS devices (including 5 sitting idle in my drawer) that you say are non-Flash. I’m talking about APIs above, not Flash in the browser.

         
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    Posted: 01 November 2010 02:08 PM #11

    Bosco (Brad Hutchings) - 01 November 2010 04:21 PM

    Pats, have you ever heard of Adobe AIR? It even reaches those 120M iOS devices (including 5 sitting idle in my drawer) that you say are non-Flash. I’m talking about APIs above, not Flash in the browser.

    To answer your question.  Yes, but the popular fight is Apple against the world when the reality of the market place is much different.  Adobe will continue to develop software but I doubt they will make much headway with Flash in the ultra portable segment. 

    There was an interesting post by 37signals today   Apple responsibility as a superpower

    One of the comments which I think matches close to my thoughts

    Thanks to Apple?s ?closed? iOS the future of the Web is going to be wide open.

    - Would Adobe be demoing Flash-to-HTML5 conversion tools and HTML5 timeline animation editors if there was an iOS Flash plugin?

    - Would over 50% of the web video now be available for playback using the HTML5 video element if there was an iOS Flash plugin?

    - Would Microsoft have ?shifted? strategy if they would have been able to get a Silverlight plugin on iOS?

    I appreciate Apple picking fights and making tough decisions when the result is positive ? i.e. rocket boosting HTML5 acceptance.

    I don?t think the market will let them bully us into things we don?t want / don?t need? we want change, and I?m just glad they have the balls to make it happen.

         
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    Posted: 01 November 2010 02:10 PM #12

    FlipFriddle - 01 November 2010 03:03 PM

    ... And don’t get me started on the “cloud” pipe-dream. That’s as laughable as the “paperless office” nonsense.

    As I’m considering to take some position in cloud computing stocks, would like to know why you think cloud computing momentum is not sustainable.  AFAIK, many businesses are jumping into private clouds (sound like outsourced intranet).  Isn’t this Web 2.0?

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  • Posted: 01 November 2010 02:18 PM #13

    Bosco (Brad Hutchings) - 01 November 2010 03:13 PM

    And given that Q3 in the US has Android with 43% of the smartphone market to iOS’s 26%

    Are we comparing devices or are we comparing platforms? If the former, Apple is in the lead. If the latter, Apple is still in the lead because we must include all devices that support the platform, i.e. in the case of iOS, that’s iPhone, iPod touch, and iPad,

    ...devices that will support the full mobile Flash experience are quickly outpacing those that do not (i.e. iPhones)

    No, they’re not. Very few devices support “the full mobile Flash experience” or are you playing games with the “mobile” modifier?

    ...why does anyone want to incur the expense of developing twice? Welcome to 1994.

    Wishful thinking, meet reality. Welcome to 2010, Brad.

         
  • Posted: 01 November 2010 02:29 PM #14

    The lack of competition for the Adobe apps has me worried as they are starting to fall into the trap the virtually killed Quark. Quark had a massive market share and installed base because there was nothing else better. Then InDesign came along, and once it hit version CS, Quarks market share virtually evaporated overnight. CS as it’s developed hasn’t really borne out the idea of a unified interface and holisitic creative package as Adobe Originally outlined. I think the acquisition of Macromedia had a big hand in that problem. For example, we’re at CS5 and the font palette still doesn’t have the same capabilities across the apps; when an open file is unsaved in Photoshop an asterisk appears to the right of the filename in the tab, in InDesign it’s on the left; and more. A lot of people have never upgraded past CS3 because they felt it hasn’t warranted it, and if you aren’t using the new bell’s and whistles it hasn’t. I had hoped that Adobe could finally conquer a web-design app and make Dreamweaver feel like a page design app, but no such luck. Having to muck with code is so 1990’s. If you had page-design software that told you you had to muck around in PostScript code to get it “just right” you would toss it in the trash. Something like Freeway Pro is getting there, but a small effort.

    As for the stock treading water, it seems reflective very well of the company treading water as well. Nothing new, just plugging along.

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  • Posted: 01 November 2010 02:50 PM #15

    Mace - 01 November 2010 05:10 PM
    FlipFriddle - 01 November 2010 03:03 PM

    ... And don’t get me started on the “cloud” pipe-dream. That’s as laughable as the “paperless office” nonsense.

    As I’m considering to take some position in cloud computing stocks, would like to know why you think cloud computing momentum is not sustainable.  AFAIK, many businesses are jumping into private clouds (sound like outsourced intranet).  Isn’t this Web 2.0?

    No problem. First my position is based on work that I and others in my profession (design and illustration) need to do, as a content creator, not consumer. I just feel like the internet and broadband connections still aren’t ubiquitous enough or reliable enough to start letting the cloud replace a local computing task completely. We’re doing work that can’t be done on a phone, an iPad, or a netbook, and need a lot of dedicated fast storage that is reliably backed up and accessible immediately. More importantly the idea of having content that I created and/or own not being in my physical possession, especially something as ethereal as bits and bytes, sitting on Google’s or someone else’s servers somewhere makes me suspicious; possession is nine-tenths of the law as they say. I think the iPad has become the “thin-client” that people were talking about a few years ago, but the cloud for now seems best suited for consumption and not creation. I hope that helped elucidate my rant. :)

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