Interest in Adobe CS3 booms, Photoshop World sells out
Since Adobe's launch of Creative Suite 3.0 last month, interest in the software amongst creative professionals has skyrocketed, with nearly all attendees surveyed at this week's Photoshop World conference saying they plan to update to one of the new bundles by year's end.
Creative professionals, eager for a glimpse of the new Adobe suites in action, flocked in herds to the Boston, Mass.-based Photoshop conference earlier this week, selling out the show for the first time in its history. Researchers from investment research firm PiperJaffray were on hand for the event and spoke one-on-one with 73 professionals regarding their spending intentions for 2007 versus last year.
"Surprisingly, nearly all of the 73 Adobe customers in our sample said they expect to move to a CS3 suite in CY07," Sr. Analyst Gene Munster wrote in a report summarizing the firm's findings. "Specifically, 96 percent said they expect to move to CS3 this year, which is up from the approximately 70 percent we have heard in our previous three surveys."
Munster partially attributed the sharp uptick in demand to Adobe's "impressive integration" of applications within its new Creative Suite product lines, saying it appears to be increasing near-term buying intentions amongst potential buyers.
Of particular interest to would-be Adobe investors, added the analyst, is that many Adobe customers who intend to move to CS3 this year are currently users of individual "point products." Therefore, with single product customers buying up into the higher priced suites, Adobe's per customer revenues should increase significantly.
"Of the 73 Adobe users in our survey, 3 percent currently use CS1, 44 percent are on CS2 and 52 percent are on Photoshop," he wrote. "In other words, more than half of the customers that intend to move to one of the CS3 suites are currently on point products."
As a benchmark, Munster noted that the average selling price (ASP) on an upgrade from Photoshop to CS3 Web or CS3 Design is $1,300, while the avg ASP for an upgrade from CS2 to CS3 Web or CS3 Design is only $340. "So those that move from Photoshop will pay nearly 3x what CS2 customers will pay," he told clients.
On average, creative professionals polled by PiperJaffray said they plan to spend 32 percent more with Adobe in 2007 than they did in 2006. That figure is up significantly from the firm's previous two surveys conducted before the announcement of CS3, when Adobe's customers said they were expecting to spend just 10 to 20 percent more in 2007.
"We are currently modeling for 15 percent creative segment revenue growth in 2007," said Munster. "The increased overall spending expectations are no doubt a result of the higher intention by customers to move to a CS3 suite during the year."
In concluding his report from Photoshop World, the PiperJaffray analyst offered investors four compelling reasons to buy Adobe shares. Among them, he said, are expectations for a solid May quarter, conservative Street models for fiscal 2007, and pent-up demand for CS3 amongst creative professional customers. He also added that shares of the San Jose-based company are currently trading at a discount relative to previous upgrade cycles.
Munster's bullish outlook on the software maker includes an Outperform rating and $51 price target.
Amazon.com is offering slight discounts on pre-orders for all Creative Suite 3.0 products.
Creative professionals, eager for a glimpse of the new Adobe suites in action, flocked in herds to the Boston, Mass.-based Photoshop conference earlier this week, selling out the show for the first time in its history. Researchers from investment research firm PiperJaffray were on hand for the event and spoke one-on-one with 73 professionals regarding their spending intentions for 2007 versus last year.
"Surprisingly, nearly all of the 73 Adobe customers in our sample said they expect to move to a CS3 suite in CY07," Sr. Analyst Gene Munster wrote in a report summarizing the firm's findings. "Specifically, 96 percent said they expect to move to CS3 this year, which is up from the approximately 70 percent we have heard in our previous three surveys."
Munster partially attributed the sharp uptick in demand to Adobe's "impressive integration" of applications within its new Creative Suite product lines, saying it appears to be increasing near-term buying intentions amongst potential buyers.
Of particular interest to would-be Adobe investors, added the analyst, is that many Adobe customers who intend to move to CS3 this year are currently users of individual "point products." Therefore, with single product customers buying up into the higher priced suites, Adobe's per customer revenues should increase significantly.
"Of the 73 Adobe users in our survey, 3 percent currently use CS1, 44 percent are on CS2 and 52 percent are on Photoshop," he wrote. "In other words, more than half of the customers that intend to move to one of the CS3 suites are currently on point products."
As a benchmark, Munster noted that the average selling price (ASP) on an upgrade from Photoshop to CS3 Web or CS3 Design is $1,300, while the avg ASP for an upgrade from CS2 to CS3 Web or CS3 Design is only $340. "So those that move from Photoshop will pay nearly 3x what CS2 customers will pay," he told clients.
On average, creative professionals polled by PiperJaffray said they plan to spend 32 percent more with Adobe in 2007 than they did in 2006. That figure is up significantly from the firm's previous two surveys conducted before the announcement of CS3, when Adobe's customers said they were expecting to spend just 10 to 20 percent more in 2007.
"We are currently modeling for 15 percent creative segment revenue growth in 2007," said Munster. "The increased overall spending expectations are no doubt a result of the higher intention by customers to move to a CS3 suite during the year."
In concluding his report from Photoshop World, the PiperJaffray analyst offered investors four compelling reasons to buy Adobe shares. Among them, he said, are expectations for a solid May quarter, conservative Street models for fiscal 2007, and pent-up demand for CS3 amongst creative professional customers. He also added that shares of the San Jose-based company are currently trading at a discount relative to previous upgrade cycles.
Munster's bullish outlook on the software maker includes an Outperform rating and $51 price target.
Amazon.com is offering slight discounts on pre-orders for all Creative Suite 3.0 products.
Comments
Since Adobe's launch of Creative Suite 3.0 last month, interest in the software amongst creative professionals has skyrocketed, with nearly all attendees surveyed at this week's Photoshop World conference saying they plan to update to one of the new bundles by year's end.
Surprisingly, no mention of Apple and/or the potential positive impact that this will have on hardware sales.
I'm also looking forward to seeing Photoshop benchmarks for the new OctoMacs
How about following it up by a survey on Appleinsider to find out how many people think OSX is better than Windows...
Sadly, this marketing ploy worked and got a lot of people amped.
If I'm amped about of CS3, it is not because of the launch event, but because it is working really nicely on Intel Macs. (Don't worry, no pirating here: my upgrade is ordered, even though prices here in Europe are up to 70% more expensive than in the US).
That is too funny LOL.
You are right.
Never the less I think this may be the year where many who upgrade to CS3 will also get a new Intel Based Mac.
The product's finally Universal, upgraders are coming both from the Adobe and Macromedia worlds and for many people it's the first upgrade worth buying since the original CS launched.
However, I wouldn't put too much money into Adobe stock just yet. Everyone I've talked to intends for this upgrade (along with a new Intel Mac) to last them four years at a minimum. That's a long time for Adobe and likely means that most plan to skip the next update in 18-24 months and then move to CS5 - or whatever they're calling it then.
And I still don't quite understand Adobe's pricing on the suite. The upgrade from Photoshop to the Design Standard (I don't have CS) will run me US $899, or $1035.00 Canadian.
However, I can upgrade InDesign, Photoshop and Illustrator separately for CAN$699. from the Apple Store. Since I don't need Acrobat Pro, I think I'll just upgrade separately. I want to see what the new GoLive offers before I commit to Dreamweaver anyway.
of course everyone they asked at the big adobe product conference plans to buy it - who the hell would go the conference if they weren't a hardcore adobe user? and what adobe hardcore user wouldn't upgrade rather soon - it's pretty ridiculously obvious survey taking here to get some rigged numbers charts happening for the media.
How about following it up by a survey on Appleinsider to find out how many people think OSX is better than Windows...
Did I miss it or they didnt say how many of the "73 Adobe customers" are OSX/windows users... that would determine if ADBE is a better stock to get than APPL
It was obvious that CS3 would bring in big upgrade dollars for Adobe.
The product's finally Universal, upgraders are coming both from the Adobe and Macromedia worlds and for many people it's the first upgrade worth buying since the original CS launched.
However, I wouldn't put too much money into Adobe stock just yet. Everyone I've talked to intends for this upgrade (along with a new Intel Mac) to last them four years at a minimum. That's a long time for Adobe and likely means that most plan to skip the next update in 18-24 months and then move to CS5 - or whatever they're calling it then.
And I still don't quite understand Adobe's pricing on the suite. The upgrade from Photoshop to the Design Standard (I don't have CS) will run me US $899, or $1035.00 Canadian.
However, I can upgrade InDesign, Photoshop and Illustrator separately for CAN$699. from the Apple Store. Since I don't need Acrobat Pro, I think I'll just upgrade separately. I want to see what the new GoLive offers before I commit to Dreamweaver anyway.
Professionals, and the companies that use this products are not going to wait 4 years. The upgrade costs are of no account. People who like to think they are professional, because they do some work on the side, may wait.
I think this is not correct, cause un upgrade from CS 2 Standard to CS 3 Standard Design costs
845,79 ? ( = 1.100 $ ) for the Dutch version or 724,79 ? ( = 950 $ ) for the English version !
NAB is still to come and I am sure FCPro Suite 6 will also help boost Mac Pro sales. All in all, I am optimistic the Mac Pro sales will be off the charts not just good.
Professionals, and the companies that use this products are not going to wait 4 years. The upgrade costs are of no account. People who like to think they are professional, because they do some work on the side, may wait.
Not true. I work for a newspaper company that owns three dailies. I can guarantee that we will not upgrade. Most of the company is still using CS1.
I'm also looking forward to seeing Photoshop benchmarks for the new OctoMacs
Quite honestly I don't see much difference between my iMac running CS2 and my Mac Pro running CS3. At least not in real world applications such as resizing or rotating a 1 gig file. I seriously doubt that 8 cores will offer substantial improvements over the current state of the art. There is apparently some issue with PS cache and cpu/memory usage that limits Photoshop's ability to leverage the hardware resources.
what I really despise is the fact they called it a launch last month. The product doesn't launch in 2 weeks.
Sadly, this marketing ploy worked and got a lot of people amped.
Agreed, although I don't like this tactic mainly for the prospect of disappointment.
While I'm sure Adobe won't disappoint, AppleTV certainly did, after an early announcement and then several delays followed by a pretty unfunctional product. I hope iPhone doesn't turn out to be the same thing...
Not true. I work for a newspaper company that owns three dailies. I can guarantee that we will not upgrade. Most of the company is still using CS1.
Absolutely. I know a number of full time digital artists who are thoroughly happy with Quark 4.
I work with a number of DTP professionals who work with G4s and the CS1 applications, as do I.
Huh? Let me ask another question. Which would you rather have, a Christmas bonus or a kick in the head?
Both questions have the same answer.
Not true. I work for a newspaper company that owns three dailies. I can guarantee that we will not upgrade. Most of the company is still using CS1.
I'm refering to companies that use these programs for competitive purposes, such as ad agencies, studios, commercial, advertising, and fashion photographers, commercial photo labs, printing plants, etc.
Newspapers don't have cutting edge needs.
Absolutely. I know a number of full time digital artists who are thoroughly happy with Quark 4.
I work with a number of DTP professionals who work with G4s and the CS1 applications, as do I.
I don't know any digital artists who use Quark. Why would they use that?
Considering that anyone who would still be using Quark 4 for anything also is using OS 9 or Classic to do so is pretty strange at this time. Quark doesn't work too well in Classic due to driver issues, among other things.
I don't know any digital artists who use Quark. Why would they use that?Considering that anyone who would still be using Quark 4 for anything also is using OS 9 or Classic to do so is pretty strange at this time.
I agree with you on the Quark 4 comment, that is complete insanity.
I have to say, for most everyday desktop publishing jobs, InDesign is superior in a lot of ways, however, some old timers are very resistant to change and they have closed systems that are built on Quark for books, multiple languages and database driven publishing. For those situations there is no compelling reason to change.
But I'm certainly not defending Quark, they scewed up royally when we all wanted an OS X version. They dragged their feet in delivering version 6. The rest is history.
If you just need a layout program, a simple container for Ilustrator and EPS Photoshop files, and typography, either program is adequate, however when the line blurs between design and production, then InDesign becomes a much better choice, especially with the integration of layerd PSD - very sweet.
But InDesign needs a lot of work. I could go on and on about the bugs in that program, but as of right now it is the best we have.