Adobe 2011 Annual Report Download - page 26

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We also believe our individual Creative products compete favorably against those offered by competitors noted above, as
discussed below.
Our InDesign product, used for professional page layout, faces competition from offerings such as Quark Xpress in the
professional page layout market. We believe InDesign competes favorably due to InDesign's innovative features, its improved
integration with our other products, our strong brand among users, positive reviews by industry experts, and more recent innovations
which address customer challenges related to publishing for tablets which is delivered in concert with our new Digital Publishing
solution offerings.
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. We
offer Adobe Ideas for graphics creation on tablets, and other software companies, including Autodesk with its 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 Dreamweaver and 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 (owned by Micro Focus) 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 alternative approaches to
building rich content and web applications such as JavaFX, HTML5, native application and Unity.
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, commonly known as 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 compete with
some of the features of Flash and Adobe Flash Player. These features include 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. We are also contributing
Adobe technology to WebKit, the open source project utilized by popular internet browsers such as Apple's Safari and Google's
Chrome browser, to improve the user experience for HTML5-based content in areas like publishing and animated graphics. By
increasing the capabilities for displaying rich content in browsers with HTML5, we believe we can increase the desire by web
content creators for our tools that create such content.
As it relates to Flash, we believe that Flash technology-based content and tooling have a significant technology lead over
other solutions trying to replicate its feature sets on PC-based systems, particularly in use cases such as online gaming, web
applications and RIAs, 3D-based content, and premium online video delivery. Given Apple's considerable market share with
smartphones and tablets, and Apple's decision to not support Adobe Flash Player on its mobile devices, we have decided (based
on this and other factors) to discontinue new development on Adobe Flash Player for mobile implementations.
As it relates to HTML5, we believe demand for authoring new HTML5 features will intensify the competition in the
professional web page layout market. We also believe the potential fragmentation of HTML5 implementations by the various
browser manufacturers that compete with each other will create the need for tool improvements to address the disparities between
platforms and devices that could result. Our Dreamweaver product and our new Adobe Edge and Adobe Muse tools are well
positioned to assist customers with migrating to new versions of standards such as HTML5, as well as delivering the means to
create rich, interactive experiences on devices and screens of all sizes. We expect new tools and solutions to come to market that
will compete with our tools. However, we believe our continuing innovation in our tools, and how these tools are integrated with
other Adobe technologies that are used by web content creators, creates a value proposition that is greater than those trying to
compete with our web page content creation offerings.
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