Adobe 2006 Annual Report Download - page 23

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23
Macromedia FreeHand MX — a professional vector graphics tool designers and illustrators use to create high
quality images that can be scaled; supports developing images for print, the Web and the Adobe Flash Player.
Macromedia JRun — an application server based on the J2EE specification; integrates with our development
tool offerings and is used to deploy applications for functions such as online banking and customer service.
COMPETITION
The markets for our products are characterized by intense competition, evolving industry standards and
business models, rapid software and hardware technology 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 and respond to emerging standards, business models and other technological changes.
Creative Solutions
In our Creative Solutions segment, we offer the Adobe Creative Suite in two versions, which consist of
combinations of several of our technologies. The Adobe Creative Suite Standard Edition combines the capabilities
of Adobe InDesign, Adobe Illustrator and Adobe Photoshop, as well as file management and integration
technology called Version Cue, and Adobe Bridge which provides a simple interface to easily organize, browse
and locate files. The Adobe Creative Suite Premium Edition adds to this the capabilities of Adobe Acrobat
Professional and Adobe GoLive. Similarly, we offer Macromedia Studio, which is a product that combines the
capabilities of Macromedia Dreamweaver, Macromedia Flash Professional, Macromedia Fireworks, Macromedia
Contribute and Macromedia FlashPaper. We also offer various bundles for customers who desire some of these
applications in one affordable package.
Our Creative Solutions products compete with many companies, including Apple, Avid, Corel, Google,
Microsoft and Quark, as they increase their presence in the creative software and solutions markets, as well as
from open source initiatives.
With respect to Microsoft, it announced a new suite of products, called Expression Studio, which will
compete with our Adobe Creative Suite and Macromedia Studio products and individual Creative Solutions
segment products. Expected to ship in the second quarter of 2007, Expression Studio includes Microsoft
Expression Design (formerly Microsoft Expression Graphic Designer) which will compete with our Adobe
Illustrator, Adobe Photoshop and Macromedia Fireworks products; Microsoft Expression Blend (formerly
Microsoft Expression Interactive Designer), which will compete with our Macromedia Flash product line;
Microsoft Expression Web (formerly Microsoft Expression Web Designer), which will compete with our
Macromedia Dreamweaver and Adobe GoLive products; and Microsoft Expression Media, which provides digital
asset management, basic image editing, and video encoding/compression capabilities, and will potentially
compete with some aspects of our creative and hobbyist-focused products. Microsoft’s new operating system,
Windows Vista, also includes new features in its Presentation Foundation that compete with Macromedia Flash.
We believe our Adobe Creative Suite products and our Macromedia Studio product compete favorably on the
basis of features and functionality, ease of use, product reliability, price and performance characteristics. The
individual technologies within the Creative Suite and Studio products also work well together, providing broader
functionality and shortened product training time for the individual who uses multiple applications to complete a
project.
In addition to our Adobe Creative Suite and Macromedia Studio products, we offer the technologies within
them as individual software applications. The competitive nature for these individual Creative Solutions products
is discussed below.
Drawing and illustration products are characterized by feature-rich competition, brand awareness and price
sensitivity. In addition to competition with Microsoft’s Expression Design product, our Adobe Illustrator and
Macromedia FreeHand products face competition from companies such as ACDsee, Autodesk, Corel, Deneba,
Mediascape, Xara and the open source product called Karbon14. We believe our products compete favorably due