No near-term impact seen from Apple's latest pro video editing push
While Apple's announcements at the National Association of Broadcasters conference on Sunday signal a continued push into the pro video space, they aren't seen as incremental to the firm's near-term growth, according one Wall Street analyst.
During a special presentation at the Venetian Ballroom in Las Vegas, the Cupertino-based Mac maker introduced video editing professionals to a new version of its Final Cut Studio video production suite. Also making its debut to a warm reception was a asset management and workflowautomation tool dubbed Final Cut Server.
"Apple has consistently been criticized for not having a way for pro editors to tackle high end projects, given the lack of tools allowing editors to work collaboratively and manage the workflow of big projects," said PiperJaffray analyst Gene Munster, whose team attended the presentation. "We believe the release of Final Cut Server is a sign that Apple is trying to push Final Cut into higher end projects. The success of this tool will likely be a critical factor in whether Apple is able to gain market share at the pro level."
Munster said the next step for Apple could arrive in the form of a more sophisticated editing offering such as a "Final Cut Extreme" edition. In a note to clients on Monday, he noted that a higher end version of Final Cut has been rumored for 2 years, but it failed to materialize again this year.
"Apple's announcements at NAB yesterday are not big news compared to the company's other product announcements this year, and we do not expect that these announcements will impact numbers in the near term," the analyst explained. "That said, Apple has consistently signaled that it is making a bigger push into the pro editing market, with new products and an expanding presence at the NAB tradeshow."
Overall, Munster said the there are two central themes at this year's NAB show -- the largest show for broadcast and post production firms -- which are the move to HD video and growth in Web-based video.
"We believe the general health of the broadcast and post production industry remains strong, and we would focus on companies positioned to capture business from one of these two major industry trends," he wrote.
Munster maintained an "Outperform" rating and $123 price target on shares of Apple.
During a special presentation at the Venetian Ballroom in Las Vegas, the Cupertino-based Mac maker introduced video editing professionals to a new version of its Final Cut Studio video production suite. Also making its debut to a warm reception was a asset management and workflowautomation tool dubbed Final Cut Server.
"Apple has consistently been criticized for not having a way for pro editors to tackle high end projects, given the lack of tools allowing editors to work collaboratively and manage the workflow of big projects," said PiperJaffray analyst Gene Munster, whose team attended the presentation. "We believe the release of Final Cut Server is a sign that Apple is trying to push Final Cut into higher end projects. The success of this tool will likely be a critical factor in whether Apple is able to gain market share at the pro level."
Munster said the next step for Apple could arrive in the form of a more sophisticated editing offering such as a "Final Cut Extreme" edition. In a note to clients on Monday, he noted that a higher end version of Final Cut has been rumored for 2 years, but it failed to materialize again this year.
"Apple's announcements at NAB yesterday are not big news compared to the company's other product announcements this year, and we do not expect that these announcements will impact numbers in the near term," the analyst explained. "That said, Apple has consistently signaled that it is making a bigger push into the pro editing market, with new products and an expanding presence at the NAB tradeshow."
Overall, Munster said the there are two central themes at this year's NAB show -- the largest show for broadcast and post production firms -- which are the move to HD video and growth in Web-based video.
"We believe the general health of the broadcast and post production industry remains strong, and we would focus on companies positioned to capture business from one of these two major industry trends," he wrote.
Munster maintained an "Outperform" rating and $123 price target on shares of Apple.
Comments
Apple delivered a new Codec that is almost lossless performance from 4K on down that allows you to edit at HD speeds. No low rez proxies.
Ever heard of Davinci the high end color grading system. Well a nifty product called Color is included for FREE.
Final Cut Server is actually an amazing product. Producer can actually create comps on windows and then send to the Mac ediitors for finishing.
Compressor is finally the app that you can rely on and has a nifty plugin for Telestream (formerly Flip4Mac) which can output almost every format one would need.
Apple delivered the goods. Whatever the impact is remains to be seen but the fact are Indies have never had more power at their disposal.
With that said, they are a good advance, and should lessen the barrier that has been there to FCS's acceptance.
I also agree that these products aren't going to add much to Apple's growth.
Several years ago it would have been different, but now, Apple has grown beyond the point where any pro products can sell enough to add significantly to the sales numbers. At most, we are talking $200 million a year. To a company with sales this year at a estimated $24 to $26 billion, that's a drop in the bucket.
the fact is, Indies have never had more power at their disposal.
That's the biggest impact I think. FCP is priced just right to be within reach of anyone wanting to shoot their own film and have it look like a big production without the big budget.
I am extremely curious about Compressor 3 though. It advertises SD to HD upconversion and reverse telecine of 29.97 material using optical flow technology. I know the "junk-in junk-out" analogy, but I wonder how that can help footage taken from any 3-chip camera? Can you shoot in true 24p with anything now?
In this case, Munster doesn't know diddly. FCP is already at the top of it's game, and the new Final Cut Studio is fantastic. I was extremely impressed with the new upgrades and I'll be ordering it this week!
I've been using the programs since ver 1, and I do agree with him.
I'm surprised that you don't. Do you really think that FCS competes on the level of Avids high end products? Not even close.
I've been using the programs since ver 1, and I do agree with him.
I'm surprised that you don't. Do you really think that FCS competes on the level of Avids high end products? Not even close.
I haven't had the pleasure (or, as I've heard, challenge) working with an Avid, I have worked with previous versions of FCP and Express for video work. My main areas of 'pseudo-expertise' are in photo-retouching, illustration and 3D. You have the advantage in this area, Mel.
At most, we are talking $200 million a year. To a company with sales this year at a estimated $24 to $26 billion, that's a drop in the bucket.
The impact is much greater than just the software sales numbers alone. Software drives hardware sales.
"We believe the release of Final Cut Server is a sign that Apple is trying to push Final Cut into higher end projects. The success of this tool will likely be a critical factor in whether Apple is able to gain market share at the pro level."
NO!? Really?
Realistically over the next few years they will gain marketshare automatically anyways, so many people are graduating everyday from places and because of the cost, it's final cut they've learned and owned.
Avid's fallen out of touch with the lower end market, what they don't realize is as the lower end's careers take off they become the higher end, and it ain't avid they know.
The impact is much greater than just the software sales numbers alone. Software drives hardware sales.
Yes, but we're only talking about the software sales.
Yes, but we're only talking about the software sales.
The impact is much greater than just the software sales numbers alone. Software drives hardware sales.
I think you both are close, but these tools allow Apple to have more content developed for iTV/iTS. There is a format war going on and this is a way for apple to attract more content makers to and keep current users in the Apple ecosystem. These sales will be many fold, with initial software sales and hardware sales, as well as the more lucrative, content sales while maintaining/growing its market dominance of apple as a downloaded media source.
I think you both are close, but these tools allow Apple to have more content developed for iTV/iTS. There is a format war going on and this is a way for apple to attract more content makers to and keep current users in the Apple ecosystem. These sales will be many fold, with initial software sales and hardware sales, as well as the more lucrative, content sales while maintaining/growing its market dominance of apple as a downloaded media source.
I don't see this as having much of an effect on media available for the Mac platform. What I did find to be interesting was the statement that Compressor 3 was used by APPLE to compress material for the iTunes Store. Many have been assuming that the content providers themselves do the compression.
While Final Cut Studio and Final Cut Server will be well recieved by the industry it will produce only a drop in the bucket profit-wise. Apple will definitely sell many more XServes and XServe RAIDs as a result of this however this isn't where the money is really at. Apple needs a consumer and Prosumer RAID.
I'm willing to bet that Apples pro sales to the pro community, as opposed to Apple's pro sales to the non pro community, is not much more than 10% of the 2007 sales numbers.
It's not that is doesn't matter, it does, but it's become much smaller in relation to what the overall company does.
What it does do, is give Apple mindshare within the business and government community.
I hope it doesn't have any impact. Seeing a major impact on revenue/profit because of what most would consider "niche" products would probably cause more people to consider Apple's userbase consists mostly of graphic artists and video users, which, as I just said, is a niche market (it might take in money, but its still a niche). If vendors start thinking like that, you might have to start kissing goodbye to some of the non-video software/hardware that people were thinking of bringing to the platform.
Well said. If Apple makes only 2% - 5% of its total revenue stream from these products it's a solid sign that the company's overall growth is healthy.
If it were 10% or greater than people could talk about how vital this product suite is to Apple's existence.
Well said. If Apple makes only 2% - 5% of its total revenue stream from these products it's a solid sign that the company's overall growth is healthy.
If it were 10% or greater than people could talk about how vital this product suite is to Apple's existence.
That's right. These products make up only a small part of its total pro sales.
I don't see this as having much of an effect on media available for the Mac platform. What I did find to be interesting was the statement that Compressor 3 was used by APPLE to compress material for the iTunes Store. Many have been assuming that the content providers themselves do the compression.
Then you don't see that streaming media to iTV and iPhone as a big market. All of the cellular phone companies do. Who should I believe?
Then you don't see that streaming media to iTV and iPhone as a big market. All of the cellular phone companies do. Who should I believe?
I didn't say that. I said that THESE products won't lead to more content for Apple's devices. There are enough tools to do that now. this will lead to the purchase of Apple tools to do it, because it might be easier, that's all.
I'm surprised that you don't. Do you really think that FCS competes on the level of Avids high end products? Not even close.
I don't see the need for Apple to directly compete with Avid on the high end. Avids are large, cumbersome, expensive systems. FCP is in many ways the exact opposite.
Plus I cannot think of too many post houses who would be willing to give up their investment in Avid to switch to any other platform.
Yes, but we're only talking about the software sales
Since Final Cut can only be used on a Mac hardware sales cannot be completely divorced from the equation.