Adobe 2006 Annual Report Download - page 33

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developer network, deeper experience in the enterprise and government markets and the mobile and device
markets, and greater sales and marketing resources. In the mobile and device markets, our intent is to license our
technology to device makers, manufacturers and telecommunications carriers that embed our technology on their
platforms, and in the enterprise and government market our intent is to form strategic alliances with leading
enterprise and government solutions and service providers to provide additional resources to further enable
penetration of such markets. If we are unable to successfully enter into strategic alliances with device makers,
manufacturers, telecommunication carriers and leading enterprise and government solutions and service
providers, or if they are not as productive as we anticipate, our market penetration may not proceed as rapidly as
we anticipate and our results of operations could be negatively impacted. Another development is the software-as-
a-service business model, by which companies provide applications, data and related services over the Internet.
Providers use primarily advertising or subscription-based revenue models. Recent advances in computing and
communications technologies have made this model viable and could enable the rapid growth of some of our
competitors. We are exploring the development of our own software-as-a-service strategies. It is uncertain
whether these strategies will prove successful. Additionally, customer requirements for “open standards” or “open
source” products could impact adoption or use with respect to some of our products.
Adverse changes in general economic or political conditions in any of the major countries in which we do
business could adversely affect our operating results.
If the economy worsens in any geographic areas where we do business, it would likely cause our future
results to vary materially from our targets. A slower economy also may adversely affect our ability to grow.
Political instability in any of the major countries in which we do business also may adversely affect our business.
Revenues from our new businesses may be difficult to predict.
As previously discussed, we are devoting significant resources to the development of product and service
offerings where we have a limited operating history. This makes it difficult to predict revenues. Additionally, we
intend to expand the use of our Mobile and Device Solutions by licensing our products for use in mobile phones,
set-top boxes, game devices, personal digital assistants, hand-held computers and other consumer electronic
devices; however, we have a limited history of licensing products in these markets and may experience a number
of factors that will make our revenue less predictable, including longer than expected sales and implementation
cycles, potential deferral of revenue due to multiple-element revenue arrangements and alternate licensing
arrangements.
If we fail to anticipate and develop new products in response to changes in demand for application software,
computers, printers, or other non PC-devices our business could be harmed.
Any failure to anticipate changing customer requirements and develop and deploy new products in response
to changing market conditions may have a material impact on our results of operations. As previously discussed,
we plan to release numerous new product offerings and upgrade versions of our current products in connection
with our transition to new business models and the acquisition of Macromedia. Market acceptance of our new
product or version releases will be dependent on our ability to include functionality and usability in such releases
that address the requirements of customer demographics with which we have limited prior experience. To the
extent we incorrectly estimate customer requirements for such products and version releases or if there is a delay
in market acceptance of such products and version releases, our business could be harmed.
We offer our Creative Solutions and Knowledge Worker Solutions application-based products primarily on
Windows and Macintosh platforms and on some UNIX platforms. We generally offer our server-based products,
but not desktop application products, on the Linux platform as well as the Windows and UNIX platforms. To the
extent that there is a slowdown of customer purchases of personal computers on either the Windows or Macintosh
platform or in general, or to the extent that significant demand arises for our products or competitive products on
the Linux desktop platform before we choose and are able to offer our products on this platform, our business
could be harmed. Additionally, to the extent that we have difficulty transitioning product or version releases to
new Windows and Macintosh operating systems, e.g., porting our applications to the “Mactel” platform, or to the
extent new releases of operating systems or other third party products make it more difficult for our products to
perform, our business could be harmed.