Adobe 2012 Annual Report Download - page 28

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COMPETITION
The markets for our products and services are characterized by intense competition, new industry standards, evolving
business and distribution models, disruptive software and hardware technology developments, frequent new product introductions,
short product life cycles, price cutting with resulting downward pressure on gross margins and price sensitivity on the part of
consumers. Our future success will depend on our ability to enhance and better integrate our existing products, introduce new
products on a timely and cost-effective basis, meet changing customer needs, extend our core technology into new applications
and anticipate and respond to emerging standards, business models, software delivery methods and other technological changes.
Digital Media
In our Digital Media segment, we offer Adobe Creative Cloud and Adobe Creative Suite in multiple editions which consist
of combinations of several of our technologies. In addition to offering the technologies within these products, we also offer many
of them as individual software applications. These products compete with those from many companies, including Apple, Aviary,
Avid, Corel, Microsoft, Quark and others, as well as from many lower-end offerings available on touch-enabled devices via app
stores, and from various open source initiatives.
Of the competitors listed, no single company has offerings identical to our Creative Suite and Creative Cloud family of
products, but our products face collective competition from a variety of point offerings, free products and downloadable apps. For
instance, Aviary provides for a free set of online, cloud-based creative tools via its partners' websites and mobile applications. Its
tools run inside web browsers and mobile applications and include an image editor, a vector graphics editor, a special effects tool,
and audio and music tools.
We believe our Creative Suite and Creative Cloud family of products competes favorably on the basis of features and
functionality, ease of use, product reliability, value and performance characteristics. The individual technologies within Creative
Cloud and the Creative Suite editions also work well together, providing broader functionality and shortened product training time
for the individual who uses multiple applications to complete a project.
As discussed below, we also believe our individual Creative Suite and Creative Cloud products compete favorably against
those offered by competitors noted above.
Our InDesign product, used for professional page layout, faces competition from offerings such as Quark Xpress in the
professional page layout market. We believe InDesign competes favorably due to the innovative features of InDesign, its improved
integration with our other products, our strong brand among users, positive reviews by industry experts, and more recent innovations
which address customer challenges related to publishing for tablets which is delivered in concert with our new Digital Publishing
Suite offerings.
Professional drawing and illustration products are characterized by feature-rich competition, brand awareness and price
sensitivity. Our Adobe Illustrator product faces competition from companies such as ACDsee, Aviary, Corel, Mediascape, Xara
and the open source product called Karbon14. Competition in this market is also emerging with a new category of drawing and
illustration applications on tablet and smartphone platforms. We offer Adobe Ideas for graphics creation on tablets, and other
software companies, including Autodesk with its SketchBook Pro application, are extending their products and feature sets to
platforms such as Apple's iPad and potentially other tablet devices. We believe our products compete favorably due to high customer
awareness of their rich features, especially the drawing and illustration functionalities, the technical capabilities of the product
and our ability to leverage core technologies from our other established products.
The demand for professional web page layout and professional web content creation tools is constantly evolving and highly
volatile. We believe Dreamweaver and Flash Professional face direct and indirect competition from desktop software companies
such as Bare Bones Software, FlashDevelop, JetBrains, Panic, MacRabbit, MacroMates, and various proprietary and open source
web authoring tools. We also face competition from Microsoft Visual Studio products, and other integrated development
environments that enable developers to create web applications from companies such as BEA Systems (a subsidiary of Oracle),
Borland (owned by Micro Focus) and IBM. We believe our products compare favorably to these applications; however, our market
share may be constrained by Microsoft's ability to target its web software to users in markets it dominates. These target customers
include users of Microsoft Office, Microsoft Windows operating system, the Microsoft Internet Explorer web browser and Microsoft
Visual Studio.
Our Flash technologies, including Adobe Flash Player and Adobe AIR, face competition from alternative approaches to
building rich content and web applications such as JavaFX, HTML5, native applications and Unity.
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