Adobe 2004 Annual Report Download - page 17

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17
products work well together, providing broader functionality and shortened product learning time for the individual
who uses multiple applications to complete a project.
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 Alias, Corel, Deneba,
Macromedia, and Mediascape. We believe our product competes favorably due to high awareness of the features in
our Illustrator product, especially the drawing and illustration functionalities, the 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 competitor,
Quark, has a competitive product, Quark XPress, which maintains a market share 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 to switch to
InDesign. We have seen an increase in the adoption of InDesign software, and we believe we will continue to see
market share gains going forward due to a product offering that contains new innovative features, our strong brand
among users, positive reviews by industry experts, adoption of InDesign by major accounts which are influencers in
their industries, and improved infrastructure support by the industry for our overall solution.
The demand for Web page layout is constantly evolving and highly volatile. We believe Adobe GoLive faces
significant direct and indirect competition for Web page layout applications from companies such as Arbortext, Bare
Bones Software, Macromedia, and Microsoft. We believe our product compares favorably to these applications;
however, our market share may be constrained by Macromedia’s position in the Web page layout market, and by
Microsoft’s ability to target its Web page layout software to users in markets they dominate, including users of
Microsoft Office, Microsoft Windows operating system, and the Microsoft Internet Explorer Web browser.
In technical authoring and publishing, our Adobe FrameMaker product faces competition from large-scale
electronic publishing systems, XML-based publishing companies such as Arbortext, as well as lower-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, and our extensive application programming interface.
In desktop publishing, our Adobe PageMaker product faces competition from other 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 can successfully compete with these types of
applications based upon the quality and features of the Adobe PageMaker product, its strong brand among users, and
its widespread adoption among printer service bureaus.
Digital Imaging and Video
The needs of digital imaging and video editing software users are constantly evolving due to rapid technology
and hardware advancements in digital cameras, digital video cameras, printers, personal computers, cellular phones,
and other new devices. Our software offerings, including Adobe Photoshop, Adobe Photoshop Album, Adobe
Photoshop Album Starter Edition, Adobe Photoshop Elements, Adobe After Effects, Adobe Audition, Adobe Encore
DVD, Adobe Premiere Elements, and Adobe Premiere Pro software, face significant competition from companies
offering similar products and will continue to face competition from emerging products. In addition, we face
competition from emerging products and technologies, including those coming from the Open Source movement.
Our mid-range consumer offerings, including Photoshop Elements and Premiere Elements, are subject to
intense competition, price sensitivity, brand awareness and strength in OEM bundling and retail distribution. We
face direct and indirect competition from a number of companies that market software which competes with ours,
including ACD Systems, AI Soft (Japan), Apple Computer, ArcSoft, Corel, i4 (Japan), Google (through their
acquisition of image management technology from Picasa), Image Software, Macromedia, Magix, Micrografx,
Microsoft, Paessler GmbH (Germany), Pegasus Imaging Company, Phase One, Photodex Corporation, Roxio,