Adobe 2007 Annual Report Download - page 23

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23
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 multiple versions which consist of
combinations of several of our technologies. In addition, we offer the technologies within them as individual software
applications. These products compete with those from many companies, including Apple, Google, Microsoft and others, as
well as from various open source initiatives.
With respect to Microsoft, their Expression Studio competes with our Adobe Creative Suite products as well as
individual Creative Solutions segment products. Expression Studio includes Microsoft Expression Design which competes
with our Adobe Illustrator, Adobe Photoshop and Adobe Fireworks products; Microsoft Expression Blend which competes
with our Adobe Flash Professional product; Microsoft Expression Web which competes with our Adobe Dreamweaver and
Adobe GoLive products; and Microsoft Expression Media which provides digital asset management, basic image editing, and
video encoding/compression capabilities and competes with some aspects of our video and hobbyist-focused products. To
compete with Adobe Flash, Microsoft has also launched Silverlight which provides capabilities for the creation of media
experiences and interactive applications for the Web that incorporate video, animation, interactivity and user interfaces.
We believe our Adobe Creative Suite competes favorably on the basis of features and functionality, ease of use, product
reliability, price and performance characteristics. The individual technologies within the Creative Suite products also work
well together, providing broader functionality and shortened product training time for the individual who uses multiple appli-
cations to complete a project.
We also believe our individual Creative Solutions products compete favorably against those offered by our competitors,
as 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 Adobe 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 to high 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 Web page layout and Web content creation tools is constantly evolving and highly volatile. In addition
to competition with Microsoft’ s Expression Blend and Web products, we believe Adobe GoLive, Adobe Dreamweaver and
Adobe Flash Professional face direct and indirect competition from desktop software companies such as Bare Bones
Software and various proprietary and open source Web authoring tools. We also face competition from AJAX and Visual
Studio products, and other integrated development environments that enable developers to create Web applications from
companies such as BEA Systems, Borland 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.
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 Elements, Adobe Photoshop Lightroom,
Adobe After Effects, Adobe Audition, Adobe Soundbooth, Adobe Encore, Adobe Premiere Elements and Adobe Premiere
Pro, face competition from companies offering similar products. We also continue to face competition from new emerging
products, including online based services and those coming from the open source movement.