Adobe 2010 Annual Report Download - page 12

12
photo albums, community newsletters, blogs, animations, videos and Websites for family, friends or community
organizations.
With the increasing use of the Web as a means for communicating, marketing and advertising, we believe a key driver
of our Digital Media Solutions business will also be the growing amount of Website content created by our customers to
deliver impactful and compelling Web-based experiences for their constituents across multiple screens, including PCs,
mobile devices, and Internet-connected living room electronics such as televisions. We also believe those who manage
Websites will want to utilize Web analytic data and other Web usage metrics to optimize their Websites and content to
improve the overall experience of their sites.
Another driver of our Digital Media Solutions business is the growth in the use of digital devices such as digital
cameras, digital video cameras, multimedia-enabled computers, DVD players, scanners, Web-capable image and video-
enabled handheld devices, cellular phones, gaming consoles and other non-PC Internet-connected devices. In addition, faster
Internet broadband speeds have made the Web a viable platform for the delivery of rich media, especially digital video. In
turn, the growth in the use of high definition (“HD”) televisions and video is driving the need for HD-enhanced video tools to
produce HD content for movies and commercial television, as well as the need to deliver or repurpose this content to be
viewed on the Web across PC and non-PC based devices.
As the use of digital photography and digital videography grows, we believe creative professionals and professional
photographers throughout the world will continue to require software solutions to edit, enhance and manage their digital
photographs and digital videos. Increasingly, we expect these users to desire software solutions which leverage the Web as a
platform to deliver the capabilities of some or all of the features they desire in desktop software. In addition, we believe
creative professionals and Web developers are increasing their use of digital video streams over the Web to create more
compelling Websites. We believe professional videographers are upgrading their systems to support HD video content
creation, enhancement and delivery. We also believe hobbyists will use, with more frequency, digital imaging and digital
video software and online hosted software services as they purchase more affordable digital cameras and digital video
cameras.
Digital Media Solutions Business Summary
Entering fiscal 2010, our Digital Media Solutions business, like our Creative and Interactive Solutions business, was
exiting a year that was adversely affected by the global economic recession and the weak general macro-economic
environment. Despite this economy-driven weakness, we maintained our focus on driving adoption of CS4 versions of our
professional imaging and video products in the first two quarters of the fiscal year. Through our execution, as the general
economy improved in early 2010, licensing of our CS4 products remained stable in the first four months of fiscal 2010.
In May of 2010, as noted earlier, we delivered CS5, the newest release of our creative toolset which included new
versions of our flagship imaging and video authoring products. Strong adoption of the new CS5 products in the second, third
and fourth quarters of fiscal 2010 helped to drive year-over-year revenue growth in our Digital Media Solutions segment
during the entire fiscal year.
Throughout fiscal 2010, we maintained our focus on making Adobe Photoshop the standard by which all other imaging
products are measured. As an essential tool in every creative customer’ s workflow, many of our customers acquire its
capabilities through the purchase of suites of our products—the management of which is handled by our Creative and
Interactive Solutions business.
With our standalone Photoshop family of products—including Photoshop Extended, Photoshop, and Photoshop
Lightroom, we experienced strong year-over-year revenue growth during fiscal 2010. The release of CS5 versions of
Photoshop, and the new version 3 of our Lightroom product, drove increased demand and revenue.
Similarly, our video authoring tools—including Premiere Pro, After Effects, Adobe Audition, and the suite containing
them called Adobe Creative Suite Production Premium—achieved growth during the year due to an improving economy,
new CS5 versions of the products, and strong execution by our sales and marketing teams to position Adobe as a leader in the
overall digital media solutions category.
During the fourth quarter of fiscal 2010, we released version 9 of our Adobe Photoshop Elements software which is our
digital imaging application targeted for amateur photographers and digital imaging hobbyists. In the same quarter, we
released version 9 of Adobe Premiere Elements software which is our video editing software that can be used by hobbyists to
enhance and share their digital video memories on DVDs. We also released a software bundle that includes the new versions
of Adobe Photoshop Elements and Adobe Premiere Elements to target hobbyists who desire both applications in one