Adobe 2012 Annual Report Download - page 30

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continue to face competition from new and free products, including web services and mobile/tablet applications that compete
directly with our Adobe Revel offering.
In professional digital imaging, software applications and services compete based on product features, brand awareness
and price sensitivity. In addition to competition with Apple's Aperture product, our Photoshop and Photoshop Lightroom products
face direct and indirect competition from a number of companies, including Corel. New image editing applications for mobile
devices and tablets with features that compete with our professional products are also emerging as adoption of these devices grows.
Our Adobe Photoshop products compete favorably due to high customer awareness of the Photoshop brand in digital imaging,
the positive recommendations for our Photoshop product by market influencers, the features and technical capabilities of the
product and our ability to leverage core features from our other established products.
Our other digital imaging and video editing offerings, including Adobe Photoshop Elements and Adobe Premiere Elements,
are subject to intense competition, including customer price sensitivity, competitor brand awareness and competitor strength in
OEM bundling and retail distribution. We face direct and indirect competition in the consumer digital imaging market from a
number of companies that market software that competes with ours, including ACD Systems, AI Soft (Japan), Apple, ArcSoft,
Corel, i4 (Japan), Google, Kodak, Nova Development, Magix, Microsoft, Photodex Corporation, Sonic (owned by Rovi), Pinnacle
(owned by Avid) and Sony.
In addition, we face competition from device, hardware and camera manufacturers such as Apple, Canon, Dell, Hewlett-
Packard, Nikon, Phase One, Sony and others as they try to differentiate their offerings by bundling, for free, their own digital
imaging software, or those of our competitors. Similarly, we face potential competition from operating system manufacturers such
as Apple with their iPhoto product and Microsoft as they integrate or offer hobbyist-level digital imaging and image management
features with their operating systems. We also face potential competition from smartphone and tablet manufacturers that integrate
imaging and video software into their devices to work with cameras that come as part of their smartphone and tablet offerings. In
addition, new social networking platforms such as Facebook (including its Instagram offering) and portal sites such as Google
and Yahoo! are becoming a direct means to post, edit and share images, bypassing the step of using image editing and sharing
software.
Competition is also emerging with a new category of imaging and video applications on tablet and smartphone platforms.
Existing as well as new competitors are extending their products and feature sets to platforms such as Apple's iPad and potentially
other tablet devices. Similarly, new cloud-based SaaS offerings continue to emerge which offer image editing and video-editing
capabilities, as well as social and sharing features. In addition to competing with our own mobile applications such as Photoshop
Express, our Lightroom product and our Photoshop Elements and Adobe Premiere hobbyist products, these products could start
to encroach upon the feature sets of our professional tools.
Applications for digital video editing, motion graphics, special effects, audio creation and DVD authoring face increasing
competition as video professionals and hobbyists migrate towards the use of digital camcorders and digital video production on
their computers, and DVD systems and online video for rich media playback. Our After Effects, Adobe Audition, Encore and
Adobe Premiere Pro software products, as well as the Adobe Creative Suite Production Premium edition which contains these
products, face competition from companies such as Apple, Avid, Canopus (owned by Grass Valley), Sonic (owned by Rovi) and
Sony.
Our Adobe Premiere Elements software product, which is targeted for use by hobbyists, faces competition from companies
such as Apple, ArcSoft, Autodesk, Avid, Broderbund, Corel, Magix, Microsoft and Sony as well as video editing capabilities found
in operating systems, hosted SaaS solutions, video editing solutions bundled by video camcorder manufacturers with their hardware
offerings, and video editing solutions bundled onto smartphones. Similarly, we face potential competition from operating system
manufacturers such as Apple with its iMovie and iDVD products and Microsoft with its Windows Movie Maker product as they
integrate or offer hobbyist-level digital imaging and image management features with their operating systems.
We believe we compete favorably against other digital imaging, digital video and consumer-focused image management
software applications with our Adobe Photoshop Elements and Adobe Premiere Elements products due to strong consumer
awareness of our brand in digital imaging and digital video, our relationships with significant OEMs, positive recommendations
for our products by market influencers, our focus on the retail software channel and strong feature sets.
After Effects is a leader in professional compositing and visual effects due to its strong feature set and its integration with
our other products that helps create a broad video editing platform for our customers. In professional digital video editing, we are
an industry leader with Adobe Premiere Pro and compete favorably due to our strong feature set, our OEM relationships and the
integration with our other products to create a broad digital video publishing platform for our customers.
With our Acrobat business, we continue to face competition from Microsoft. Their widely used Office product offers a
feature to save Microsoft Office documents as PDF documents, which competes with Acrobat. They also offer a proprietary digital
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