Adobe 2012 Annual Report Download - page 29

29
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 vendors such as Apple, Google and Microsoft, and contains new features which compete with some
of the features of Flash. 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 such as 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, 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, in 2011 we decided (based on this and
other factors) to discontinue new development on Adobe Flash Player for mobile browser implementations in favor of supporting
Adobe AIR for the packaging of standalone mobile applications developed using Flash technologies.
As it relates to HTML5, we believe demand for authoring using 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 vendors 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, new Adobe Edge Tools & Services and Adobe Muse 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.
As customers such as publishers and media companies increase their desire to deliver their assets to new platforms such as
mobile devices and tablets, we expect new and existing companies to continue to offer solutions that address these challenges that
are competitive with our Digital Publishing Suite. Many design agencies are building capabilities to offer such solutions, and
companies such as Amazon, Apple, Aquafada, Google, Texterity and Zinio offer an alternative format and business model for the
delivery of newspaper and magazine content to mobile devices.
With our Adobe Media Server solution, we face competition from Microsoft with its Windows Media Server for Windows
Media and Silverlight, as well as Apple, Move Networks, Real Networks, Wowza Media Systems and others.
Our tools used to create applications for PCs and mobile devices such as smartphones and tablets are influenced by evolving
industry standards, rapid software and hardware technology developments and frequent new product and technology introductions
by companies or open-source initiatives targeting similar opportunities. Technologies and products that compete with our tools
for creating mobile applications include solutions that utilize Java and Scalable Vector Graphics. On Apple devices running the
iOS operating system, on devices running Microsoft operating systems and on devices running the Google Android operating
system, developers can choose to use native development environments for those platforms. They can also utilize other developer
solutions that can be compiled to run on such devices, including those from companies such as Appcelerator, Unity Technologies,
Sencha and Strobe.
We believe our robust programming model and developer tools used to create rich content, our large developer community
and ecosystem that utilize our tools and the growth of companies who utilize our Flash, AIR, PhoneGap and PhoneGap Build
solutions as a basis for rich content and application delivery across multiple screens are key assets in our ability to effectively
compete in this market. Further, the rich expressiveness of Flash, which provides the capability to deliver audio, video, motion
graphics, vector graphics and visual effects resulting in rich user experiences and interfaces in browsers on PC platforms and as
applications across PC and mobile device platforms such as iOS and Android, is a key differentiation when compared to the
capabilities of alternate solutions, especially for gaming and premium video delivery use cases.
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, PCs, tablets, mobile phones and other new devices. Our imaging
and video software offerings, including Photoshop, Photoshop Lightroom, Photoshop Elements, After Effects, Adobe Audition,
Encore, Adobe Premiere Elements and Adobe Premiere Pro, face competition from companies offering similar products. We also
Table of Contents