Adobe 2002 Annual Report Download - page 44

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13
COMPETITION
The markets for Adobe products are characterized by intense competition, evolving industry standards, rapid
technology and hardware developments, and frequent new product introductions. Our future success will depend on
our ability to enhance 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 or respond to emerging
standards and other technological changes.
Creative Professional
In our Creative Professional segment, we offer several products, including Adobe GoLive, Adobe Illustrator,
Adobe InDesign, Adobe PageMaker, and Adobe FrameMaker. We believe these individual products compete favor-
ably on the basis of features and functionality, ease of use, product reliability, and price and performance
characteristics. In addition, the products work well together, providing broader functionality and shortened product
learning time for the individual who uses multiple applications to complete a project.
We also offer several product “Collections,” which are packaged combinations of several of our products.
Collections targeting the creative professional customer include the Adobe Design Collection, the Adobe Publishing
Collection, and the Adobe Web Collection. The approach of providing packages with multiple Adobe products
allows us to market them as complete solutions for specific market needs.
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 Corel and Macromedia. We
believe our product competes favorably due to high awareness of the features in our Illustrator product, especially
the drawing and illustration functionalities, the features and technical capabilities of the product, and our ability to
leverage core technologies from our other established products.
Our Adobe InDesign product, used for professional page layout, faces tough competition. The main
competitive product, Quark XPress, has a leadership position in the professional page layout market. Quark also
benefits from an established industry infrastructure that has been built around the use of their XPress product in print
shops and service bureaus, and through the development of third party plug-in products. Barriers to the adoption of
Adobe InDesign by Quark XPress customers include this infrastructure, as well as the cost of conversion, training,
and software/hardware procurement required in a switch to InDesign in a tough economic environment. We believe
we will increase adoption of InDesign software due to our superior product offering with new innovative features,
such as typographical treatment, the integration of InDesign with other Adobe products used by creative
professionals, our strong brand among users, our support for Apple's Mac OS X operating system, and improved
infrastructure support by the industry for our overall solution.
The demand for Web page layout is constantly evolving and highly volatile, and has been impacted by both the
recent global economic downturn and the reduction in Web product spending. We believe Adobe GoLive trails in
market share and faces significant direct and indirect competition for Web page layout applications from companies
such as Macromedia and Microsoft. We believe our product compares favorably due to the features of Adobe
GoLive. However, we believe the market opportunity for Web-based products continues to be negatively impacted
by the continuing effects of the global economic downturn that began in 2001.
In the technical authoring and publishing market, our Adobe FrameMaker product faces competition from
large-scale electronic publishing systems, XML-based publishing companies such as Arbortext, as well as low-end
desktop publishing products such as Microsoft Word. Competition is based on the quality and features of products,
the level of customization and integration with other publishing system components, the number of hardware
platforms supported, service, and price. We believe we can successfully compete based upon the quality and features
of the Adobe FrameMaker product, our extensive application programming interface, and the large number of
platforms supported.
In the business document publishing and authoring market, our Adobe PageMaker product faces competition
from other desktop publishing software products, including Microsoft Publisher. Competition is based on the quality
and features of products, ease-of-use, printer service support, and price. We believe we have a strong product and