Adobe 2010 Annual Report Download - page 29

29
Professional products; and Microsoft Expression Web, which competes with our Adobe Dreamweaver product. Similarly,
Aviary provides for free a set of online, cloud-based creative tools via their Website. Their tools run inside Web browsers and
include an image editor, a vector graphics editor, a special effects tool, and audio and music tools.
We believe our Adobe Creative Suite family of products 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
editions also work well together, providing broader functionality and shortened product training time for the individual who
uses multiple applications to complete a project.
We also believe our individual Creative products compete favorably against those offered by competitors noted above,
as discussed below.
Our Adobe InDesign product, used for professional page layout, faces competition from Quark Xpress 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. Although these barriers
remain, we believe we have increased the market share of our InDesign software. We also believe we will continue to see
market share gains going forward due to a product offering that contains new innovative features, improved integration with
our other products, 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.
Professional 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 product faces
competition from companies such as ACDsee, Aviary, Corel, Mediascape, Xara and the open source product called
Karbon14. Competition in this market is also emerging with a new category of drawing and illustration applications on tablet
and smartphone platforms. Software companies, including Autodesk with their SketchBook Pro application, are extending
their products and feature sets to platforms such as Apple’ s iPad and potentially other tablet devices. We believe our products
compete favorably due to high customer 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 professional Web page layout and professional 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
Dreamweaver and Adobe Flash Professional face direct and indirect competition from desktop software companies such as
Bare Bones Software, FlashDevelop, JetBrains, Panic, MacRabbit, MacroMates, and various proprietary and open source
Web authoring tools. We also face competition from Microsoft Visual Studio products, and other IDEs that enable
developers to create Web applications from companies such as BEA Systems (a subsidiary of Oracle), 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.
Our Flash technologies, including Adobe Flash Player and Adobe AIR, face competition from Microsoft Silverlight, as
well as alternative approaches to building rich content and Web applications such as JavaFX and Unity. Microsoft markets its
Silverlight product and technology as an alternative to our Flash and AIR technologies. Silverlight provides capabilities for
the creation of media experiences and interactive applications for the Web that incorporate video, animation, interactivity and
user interfaces. We believe Flash and AIR compete favorably against Silverlight due to the broad reach of Adobe Flash
Player and AIR on PCs and non-PC devices, due to the use of Flash and AIR as a means to deliver rich, cross-platform,
multiscreen content, and due to the use of our market-leading creative tools as an essential part of existing creative
workflows.
The HTML specification, which among other things describes the syntax and format for encoding Web pages, has
evolved over several decades and Adobe has participated in its evolution. Our tools are among the leading applications used
by Web designers and developers to create HTML-based content that is displayed and viewed in Web browsers. The newest
version of HTML, HTML5, is being developed by an industry consortium that includes Adobe and leading browser
manufacturers such as Apple, Google and Microsoft, and contains new features which will compete with some of the features
of Flash and Flash Player, such as the ability to create and display rich advertising and play video natively within the
browser. We are working to implement support for HTML5 in our creative product solutions, and we believe we will provide
the widest array of support and tooling for HTML5 content creation over time. Yet, we believe the competing interests of the