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Why Apple Should Acquire Adobe
aabode writes "OSWeekly.com's Brandon Watts suggests that Apple should acquire Adobe. Why? 'While Apple has done a great job of developing media applications for beginners (the iLife suite is a good example of this), they could use a boost on the professional side. Granted, Final Cut Studio has become the standard when it comes to professional video editing, and Logic Studio is a great professional solution for editing audio, but what about the graphics and Web design segments of the market? If people want tools to support these interests on the Mac, then they turn to Adobe.'"
Pros and Cons:
Pros: establishes Apple as THE platform for photographers and designers by removing the Windows competition. Sure, Apple could continue to fund the development of Photoshop and Illustrator for Windows. But the latest and greatest version would always appear on the Macintosh first.
Cons: even with its current pile of money (iPhone and Ipod are two very successful products after all), I am not sure Apple has enough money to buy Adobe. Not to mention Microsoft would certainly file an anti-trust suit. It also raises all kind of legal snafus in Europe for instance, which would certainly frown upon it.
Cons: Postscript and PDF are both open standards. I am not sure I'd like to see Apple control their future.
So, yes, and interesting prospect. Still pretty unlikely, though.
The right to offend is far more important than the right not to be offended. (Rowan Atkinson)
Sometimes its fun to write an entire column based on an incredibly unlikely and impractical idea. If we are going to make up crap based on conversations with our wives, I propose Apple buys a real Time Machine, goes back in time to 3000 years ago and begins a superior civilization in the North Americas, so that we have populated the Galaxy by tomorrow. And one more thing... Super Intelligent Llamas.
Any other fricken fantasy stories we need to get promoted as actual 'News For Nerds. Stuff That Matters'?
Cause the writer of the article has stock in (company) and wants to make a quick buck...
I know I've seen this same headline with Nintendo there, and I can't help but think there've been others. I just don't care enough to search. If Apple wanted to buy something, they'd buy it. I think Apple's pretty happy where they are though.
Adobe's products have gotten insanely bloated and crappy the past 5 years, and Apple isn't doing much better either. Quicktime and Itunes love to autorun 8 tons of horsecrap, and Adobe does the same + does a bunch of bullshit activation too. Acrobat Reader has become such a disaster that anyone with a clue has dumped it for Foxit (We just did that at work for 500+ workstations, and we are HEAVY users of the pdf format).
I can see it now. Adobe Quicktime Version 13 Profesional will have 5 autostart services, have mandatory bullshit activation every time it's actively used + background activation every 60 minutes, hijack all your multimedia settings, require 2 gigabytes of disk space and 4 gigabytes of ram, and kill your dog for good measure.
Lawyers, MBA's, RIAA? A jedi fears not these things!
If you ask me, Adobe shouldn't be looking to be acquired by an OS-maker. Instead, Adobe should be looking to acquire an OS.
I've been working in IT for various kinds of media companies, and in a lot of cases, there are people whose entire jobs are centered around using Adobe apps. You could throw Adobe CS3 on any system and any OS, and those people would still be able to do their jobs just fine. The OS doesn't matter.
So let's say Adobe develops their own Linux/BSD variant or buys someone else's. With very little work on their end, they could actually become a competitor to Microsoft. What often keeps linux from a lot of desktop these days is the lack of specific professional media applications. Adobe could make their own port of OpenOffice/Evolution/Linux, bundle that with Adobe CS3, and have a pretty formidable media/business desktop OS.
WItness that Mac OS X 10.4 and later come with a complete set of Photoshop clone construction tools. See Acorn, DrawIt, Pixelmator and even later versions of GraphicConverter. Adobe dragged their heels too long.
This proposal isn't like most out there (small fry buying company 10 times their size, etc.) which are completely outside the realm of possibility.
ADBE's market cap is 16% (27 Billion) of AAPL's market cap (167 Billion). APPL has $15 Billion in cash on the books, so this couldn't be an all cash deal, but it could be a mix of stock and cash or an all stock deal.
It is worth considering an AAPL acquisition of ADBE. Of course, AAPL would have to offer a premium. If I was putting together the deal, I would offer 1 AAPL share for 4 ADBE shares and $10 a share in cash.
This would value ADBE at 46.75 + $10 = $56.75 a share. This is an 18% permium to today's price. That is a reasonable premium on ADBE's current valuation.
Yours,
Jordan
My natural reaction to any blog-sourced article is to ask who the hell is this person and why should consider their opinion credible at all. Unfortunately, there's no bio at all for this Brandon Watts. Another pointless blog-spam as far as I'm concerned.
But that doesn't mean they should spend it on Adobe, unless they've gotten wind of something the rest of us haven't.
Apple has a pretty compelling story just now. They have a new OS with tools developers are excited about using. The Mac is gaining market share, so developers are more inclined to write software for the platform. That should include Adobe. However, much of Adobe's software is written using Apple's 32-bit Carbon framework. It will be an expensive proposition for Adobe to move forward and develop new 64-bit Cocoa versions of their code.
If Apple could positively determine that Adobe was not going to make this investment it might make sense for them to buy them to make sure that it happened. Adobe software is hugely important to Apple--look at how many people held off making the transition to Intel Macs until CS3 was ready. Apple is not a huge company, employee-wise. They could eventually develop competing products at the cost of increasing their number of employees, a lead time to market and risking incompatibility with the existing market standard. Given those terms, purchasing Adobe could be the cheaper option.
But unless Adobe plans to abandon the Mac this purchase wouldn't make much sense for Apple.
The thing is, print and prepress are steeply declining. Magazines are getting thinner, readership is dropping for everything from porn to popular science; why pay for month old news and views when you can get it tonight, for free, up to the second, on the web?
We spent literally years building extensive prepress into our products until we had a more flexible and more powerful model than Photoshop had, something able to flex further and simply get a better print result by virtue of better control over the various print issues like allowing a mix of UCR and GCR approaches, more flexible and easier to use color separation models; and it used to be that a lot of our customers were very into getting that last bit of quality through the printshop and onto the paper.
No longer. Our userbase continues to increase, but a goodly number of our old print customers have moved on to web-centric undertakings and we hear from relatively fewer new print people. I can't say I'm disappointed, a prepress person tends to need a lot more care and support than a web designer does, all other things being equal.
The problem that a company like Adobe faces is that very little of what Photoshop does is all that hard to find in less expensive software. Apple knows this; buying Adobe would simply be buying a name, because the underlying technology is no mystery to anyone. Apple's already facing Adobe directly with the Aperture / Lightroom product pair - if Apple wants an imaging product, there are comparably powerful engines out there already, or they could devote a couple of savvy imaging people and a GUI person to the project and they'd have something significant in a year or so. As opposed to spending how much for Adobe? Jobs is a pain in the ass, particularly when he gets distracted by consumer gear such as phones and mpeg players, but I've never heard him successfully characterized as actually being stupid with regard to the computer business.
In the end, if you lift up the rock the prepress people live under, you're going to find a lot of dead and dying critters. Print just isn't that big a deal any more other than to the shrinking demographic who are invested in it for whatever reason.
Web graphics, animation, video, photography - Apple's already prodding these markets. Do they really need Adobe? I can't see that they do.
I've fallen off your lawn, and I can't get up.