PDF is an ISO standard. Apple doesn't need to pay Adobe to use it, let alone own them -- and neither does anyone else.
True, PDF is currently open source and royalty-free use for developing software complying with its PDF specification. However Adobe holds patents to PostScript and PDF, Adobe controls version updates and sells best PDF authoring tools. Now they adding multimedia and Flash capabilities to PDF. Who knows were this technology goes and what it will compete against.
Conclusions cannot be more reliable than the data they are based upon.
May 19 (Bloomberg) -- Smartphone manufacturers? sales rose the most in four years during the first quarter as Research in Motion Ltd., Apple Inc. and makers of Android-equipped phones extended gains, market-research company Gartner Inc. said.
Estimates are that at the end of the 2010 fiscal year, Apple will have about $59 billion in sales, and MS will have about $61.75 billion.
Market cap doesn't just reflect what a company is worth at the time, but what it is believed it will be worth in the fairly near future. In fiscal year 2011, it's likely that Apple's sales will be about $75 billion, while MS's will be about $67 billion.
They continue to move further apart as the years go by.
The difference here is that MS's fortunes rise and fall as the growth of the PC industry rises and falls, but Apple has been making new industries, or at least, extending the ones they see are vulnerable.
So far, MS has continued to fail to understand how this works. They are falling further behind.
It would not destroy value of the purchase. Key Adobe products have no alternative on the market, so pro Windows users of Adobe products would have to migrate to Mac. Now they would have to buy both Apple hardware and Apple software. The loss of Windows soft revenue would be compensated by gain in Apple soft/hardware revenue. Ownership of Flash and PDF technologies would also make Apple even bigger player.
Imagine, instead of this scenario Google buys Adobe. Imagine, Google now owns Flash and PDF, then Google ports complete Adobe Creative suite to its Chrome OS, making it secondary for other platforms, gradually decreasing support.
Which scenario do you like more?
It has nothing to do with I like. It has all to do with what is realistic. It isn't realistic for Apple to buy Adobe. You're wrong in your assessment. It would be very difficult for Apple to discontinue windows development. They've been talking about this as a possible deal in the industry for years. No one thinks it could work, and I agree.
True, PDF is currently open source and royalty-free use for developing software complying with its PDF specification. However Adobe holds patents to PostScript and PDF, Adobe controls version updates and sells best PDF authoring tools. Now they adding multimedia and Flash capabilities to PDF. Who knows were this technology goes and what it will compete against.
I think it would be extremely difficult to stuff this genie back in the bottle, and I don't see the incentive for them to try. Adobe's handling of PDF has made it ubiquitous, which has been very good for their PDF authoring tools business. Postscript has been treated in an entirely different way by Adobe, on a pure fee-for-license basis. Apple might well have used Postscript for OSX's display technology (if only because it was used in NeXTStep) but they opted PDF instead, presumably to avoid Adobe's control and fees. As a result, while Postscript hasn't exactly died on the vine, it has hardly become as widely distributed as PDF. A lesson learned, one would hope.
This article in particular is completely witless. What are we to make of reasoning such as,
Quote:
That's a pretty powerful argument for me, especially as the rise in Apple's shares as well as the revenue generated would almost certainly allow it to recoup the price it paid for Adobe within 24 months.
Oh really? Does the writer have even the first inkling about what creates share price? I would say not. So let's see what happens to Apple's market value when they pay $20 billion for Adobe and then slice the revenue generated by the acquisition immediately in half. But Apple does get PDF, which they already use for nothing. What a brilliant plan.
So let's see what happens to Apple's market value when they pay $20 billion for Adobe and then slice the revenue generated by the acquisition immediately in half.
I must admit that due to my ignorance in finance, your point completely eludes me.
I must admit that due to my ignorance in finance, your point completely eludes me.
The suggestion was that Apple buy Adobe and then discontinue their Windows products. I don't see investors reacting kindly to the idea of acquiring a company then decreasing its ability to generate revenue by half. Possibly more than half. It depends on what portion of Adobe's revenue comes from their Windows products. The writer lamely believes that by so doing, the purchase price would "almost certainly" be reclaimed within in two years.
I must admit that due to my ignorance in finance, your point completely eludes me.
It's what I've already said. If Apple cuts back Adobe's lines, the value of the purchase dramatically drops. They then have to take a loss on their sheets, possibly for "goodwill" And the price of the stock drops.
I can't see a bit of good coming from this.
The argument that they would get Flash is really crazy. When Macromedia put themselves up for sale several years ago, Apple could have gotten them for $4 billion. They would have owned Flash when it was far more important to them. Now, they want to stamp it out. Nuts!
The suggestion was that Apple buy Adobe and then discontinue their Windows products. I don't see investors reacting kindly to the idea of acquiring a company then decreasing its ability to generate revenue by half. Possibly more than half. It depends on what portion of Adobe's revenue comes from their Windows products. The writer lamely believes that by so doing, the purchase price would "almost certainly" be reclaimed within in two years.
About 70% of their business is from the Windows side. One reason is that a number of their products are only for Windows.
About 70% of their business is from the Windows side. One reason is that a number of their products are only for Windows.
Right, thanks, I figured it had to be at least half.
Another piece of red meat to throw out: Considering their frosty relations, it's extremely unlikely that Adobe would want to be taken over by Apple. Therefore, it would be a hostile takeover -- which means it would be far more expensive, time consuming and distracting than a friendly merger.
Another piece of red meat to throw out: Considering their frosty relations, it's extremely unlikely that Adobe would want to be taken over by Apple. Therefore, it would be a hostile takeover -- which means it would be far more expensive, time consuming and distracting than a friendly merger.
That's very true, and then major people at the company would jump ship, no doubt to the very companies Apple wouldn't want them to be with.
That would devalue the deal even more.
People who favor this haven't thought it through, even if they do have blogs!
This article in particular is completely witless. What are we to make of reasoning such as,
Oh really? Does the writer have even the first inkling about what creates share price? I would say not. So let's see what happens to Apple's market value when they pay $20 billion for Adobe and then slice the revenue generated by the acquisition immediately in half. But Apple does get PDF, which they already use for nothing. What a brilliant plan.
I don't thing Apple would immediately stop developing for Window. This would be gradual 5-7 year process, allowing creative windows users to migrate to Mac. Even after that Apple may continue selling non-pro versions of these soft.
A basic math discounting a revenue from selling Windows product is too primitive.
Think how much these worth:
Revenue from migrated Whidows users who now would have to buy hardware in addition to software.
Control over certain technologies and patents ownership.
Creative computing market dominance.
Independence from software vendors
Diversification of hardware business with high margin software business
I don't thing Apple would immediately stop developing for Window. This would be gradual 5-7 year process, allowing creative windows users to migrate to Mac. Even after that Apple may continue selling non-pro versions of these soft.
This isn't the plan advanced by this writer, but even so, it is still not plausible that Apple could replace the entire purchase price within two years, which is their claim, let alone the 70% loss in revenue which would have to be made up, later if not sooner. All from software sales? Perhaps not, being very optimistic. But being even slightly realistic, the huge risk involved becomes apparent.
All big mergers are risky; few work out as planned. Adding onto that inherent level of difficulty the risk of having to replace most of the revenue the acquisition produced, turns it into a virtual impossibility. AAPL would be slammed immediately by investors and for years afterwards if they ever tried to pull a stunt like that. The doubts over their ability to make it work would be enormous, and for good reason.
I don't thing Apple would immediately stop developing for Window. This would be gradual 5-7 year process, allowing creative windows users to migrate to Mac. Even after that Apple may continue selling non-pro versions of these soft.
A basic math discounting a revenue from selling Windows product is too primitive.
Think how much these worth:
Revenue from migrated Whidows users who now would have to buy hardware in addition to software.
Control over certain technologies and patents ownership.
Creative computing market dominance.
Independence from software vendors
Diversification of hardware business with high margin software business
There seems to be some "thrill" over the idea of Apple buying Adobe. Despite writers denying it, it's more of a " Take THAT Adobe, you traitor!" kind of an attitude, rather than a good business sense for it. The reasons presented are simply wrong in their assumptions, or just plain flaky.
There are assumptions about migration that aren't all that well understood. Adobe makes products that other companies make in a number of areas. Why the assumption that those customers would migrate to Apple, rather than to other software while keeping their PCs? It's a bad assumption. CS5 is only a part of Adobe's portfolio. It's not as though Quark doesn't still have the majority of publishing content makers, because it does. This could drive more into their camp, damaging CS5 sales considerably.
Apple doesn't need to own PDF, and would likely not want the headache of keeping the millions of users updated, and upgraded. They couldn't want to get into the arguments about PDF security either.
Apple is trying to depreciate Flash, why would they want to own it?
It would also take years to integrate the two companies, with many, if not most of the top people at Adobe leaving over that time. This is consistently ignored in the arguments, but is one reason why most big mergers work out poorly. The companies cultures will be too different. We look at Apple's purchase of PA almost two years ago as something great, but shortly afterwards, the top people, the very people that posters here were so excited about Apple getting, left. That would happen here as well.
There seems to be some "thrill" over the idea of Apple buying Adobe. Despite writers denying it, it's more of a " Take THAT Adobe, you traitor!" kind of an attitude, rather than a good business sense for it. The reasons presented are simply wrong in their assumptions, or just plain flaky.
The advocacy for Apple taking over Adobe seems to come from two camps. The first, as you say, are the revenge motivated. This of course is bad business. The second is the CS users who are perennially annoyed by Adobe's half-hearted commitment to Mac products. I can almost understand that reasoning, or I could if I thought that Apple's future was somehow lashed to CS. At one time this might have actually been true, but I can't see how that argument can be made today.
Comments
Dear Bill,
DAAAAAAAAA!
regards,
Steve.
You forgot...
Sent from my iPhone.
PDF is an ISO standard. Apple doesn't need to pay Adobe to use it, let alone own them -- and neither does anyone else.
True, PDF is currently open source and royalty-free use for developing software complying with its PDF specification. However Adobe holds patents to PostScript and PDF, Adobe controls version updates and sells best PDF authoring tools. Now they adding multimedia and Flash capabilities to PDF. Who knows were this technology goes and what it will compete against.
Conclusions cannot be more reliable than the data they are based upon.
May 19 (Bloomberg) -- Smartphone manufacturers? sales rose the most in four years during the first quarter as Research in Motion Ltd., Apple Inc. and makers of Android-equipped phones extended gains, market-research company Gartner Inc. said.
http://www.businessweek.com/news/201...-update1-.html
Except that, as I said, RIM lost marketshare.
http://macdailynews.com/index.php/we...omments/25144/
and again:
Apple, Inc.
Revenue - $42.91 billion
Operating income - $11.74 billion
Total assets - $47.50 billion
Total equity - $31.64 billion
Microsoft
Revenue - $58.437 billion
Operating income - $20.363 billion
Total assets - $77.888 billion
Total equity - $39.558 billion
Stop sensationalizing. Still a huge gap.
Estimates are that at the end of the 2010 fiscal year, Apple will have about $59 billion in sales, and MS will have about $61.75 billion.
Market cap doesn't just reflect what a company is worth at the time, but what it is believed it will be worth in the fairly near future. In fiscal year 2011, it's likely that Apple's sales will be about $75 billion, while MS's will be about $67 billion.
They continue to move further apart as the years go by.
The difference here is that MS's fortunes rise and fall as the growth of the PC industry rises and falls, but Apple has been making new industries, or at least, extending the ones they see are vulnerable.
So far, MS has continued to fail to understand how this works. They are falling further behind.
It would not destroy value of the purchase. Key Adobe products have no alternative on the market, so pro Windows users of Adobe products would have to migrate to Mac. Now they would have to buy both Apple hardware and Apple software. The loss of Windows soft revenue would be compensated by gain in Apple soft/hardware revenue. Ownership of Flash and PDF technologies would also make Apple even bigger player.
Imagine, instead of this scenario Google buys Adobe. Imagine, Google now owns Flash and PDF, then Google ports complete Adobe Creative suite to its Chrome OS, making it secondary for other platforms, gradually decreasing support.
Which scenario do you like more?
It has nothing to do with I like. It has all to do with what is realistic. It isn't realistic for Apple to buy Adobe. You're wrong in your assessment. It would be very difficult for Apple to discontinue windows development. They've been talking about this as a possible deal in the industry for years. No one thinks it could work, and I agree.
True, PDF is currently open source and royalty-free use for developing software complying with its PDF specification. However Adobe holds patents to PostScript and PDF, Adobe controls version updates and sells best PDF authoring tools. Now they adding multimedia and Flash capabilities to PDF. Who knows were this technology goes and what it will compete against.
I think it would be extremely difficult to stuff this genie back in the bottle, and I don't see the incentive for them to try. Adobe's handling of PDF has made it ubiquitous, which has been very good for their PDF authoring tools business. Postscript has been treated in an entirely different way by Adobe, on a pure fee-for-license basis. Apple might well have used Postscript for OSX's display technology (if only because it was used in NeXTStep) but they opted PDF instead, presumably to avoid Adobe's control and fees. As a result, while Postscript hasn't exactly died on the vine, it has hardly become as widely distributed as PDF. A lesson learned, one would hope.
You're wrong in your assessment... No one thinks it could work, and I agree.
Well, 'you are wrong in your assessment'. There are plenty of people who think it could work. This is just a quick list:
Should Apple Buy Adobe And Stop Developing For Windows?
http://www.itproportal.com/portal/ne...oping-windows/
7 Reasons For Apple To Acquire Adobe
http://thenextweb.com/apple/2010/03/...acquire-adobe/
Why Apple Should Buy Adobe
http://theappleblog.com/2010/03/09/w...uld-buy-adobe/
Should Apple Buy Adobe And Stop Developing For Windows?
http://www.itproportal.com/portal/ne...oping-windows/
This article in particular is completely witless. What are we to make of reasoning such as,
That's a pretty powerful argument for me, especially as the rise in Apple's shares as well as the revenue generated would almost certainly allow it to recoup the price it paid for Adobe within 24 months.
Oh really? Does the writer have even the first inkling about what creates share price? I would say not. So let's see what happens to Apple's market value when they pay $20 billion for Adobe and then slice the revenue generated by the acquisition immediately in half. But Apple does get PDF, which they already use for nothing. What a brilliant plan.
So let's see what happens to Apple's market value when they pay $20 billion for Adobe and then slice the revenue generated by the acquisition immediately in half.
I must admit that due to my ignorance in finance, your point completely eludes me.
I must admit that due to my ignorance in finance, your point completely eludes me.
The suggestion was that Apple buy Adobe and then discontinue their Windows products. I don't see investors reacting kindly to the idea of acquiring a company then decreasing its ability to generate revenue by half. Possibly more than half. It depends on what portion of Adobe's revenue comes from their Windows products. The writer lamely believes that by so doing, the purchase price would "almost certainly" be reclaimed within in two years.
Well, 'you are wrong in your assessment'. There are plenty of people who think it could work. This is just a quick list:
Should Apple Buy Adobe And Stop Developing For Windows?
http://www.itproportal.com/portal/ne...oping-windows/
7 Reasons For Apple To Acquire Adobe
http://thenextweb.com/apple/2010/03/...acquire-adobe/
Why Apple Should Buy Adobe
http://theappleblog.com/2010/03/09/w...uld-buy-adobe/
Nuts! I don't know who these people are, and the reasons they give are nuts.
I must admit that due to my ignorance in finance, your point completely eludes me.
It's what I've already said. If Apple cuts back Adobe's lines, the value of the purchase dramatically drops. They then have to take a loss on their sheets, possibly for "goodwill" And the price of the stock drops.
I can't see a bit of good coming from this.
The argument that they would get Flash is really crazy. When Macromedia put themselves up for sale several years ago, Apple could have gotten them for $4 billion. They would have owned Flash when it was far more important to them. Now, they want to stamp it out. Nuts!
The suggestion was that Apple buy Adobe and then discontinue their Windows products. I don't see investors reacting kindly to the idea of acquiring a company then decreasing its ability to generate revenue by half. Possibly more than half. It depends on what portion of Adobe's revenue comes from their Windows products. The writer lamely believes that by so doing, the purchase price would "almost certainly" be reclaimed within in two years.
About 70% of their business is from the Windows side. One reason is that a number of their products are only for Windows.
About 70% of their business is from the Windows side. One reason is that a number of their products are only for Windows.
Right, thanks, I figured it had to be at least half.
Another piece of red meat to throw out: Considering their frosty relations, it's extremely unlikely that Adobe would want to be taken over by Apple. Therefore, it would be a hostile takeover -- which means it would be far more expensive, time consuming and distracting than a friendly merger.
Another piece of red meat to throw out: Considering their frosty relations, it's extremely unlikely that Adobe would want to be taken over by Apple. Therefore, it would be a hostile takeover -- which means it would be far more expensive, time consuming and distracting than a friendly merger.
That's very true, and then major people at the company would jump ship, no doubt to the very companies Apple wouldn't want them to be with.
That would devalue the deal even more.
People who favor this haven't thought it through, even if they do have blogs!
This article in particular is completely witless. What are we to make of reasoning such as,
Oh really? Does the writer have even the first inkling about what creates share price? I would say not. So let's see what happens to Apple's market value when they pay $20 billion for Adobe and then slice the revenue generated by the acquisition immediately in half. But Apple does get PDF, which they already use for nothing. What a brilliant plan.
I don't thing Apple would immediately stop developing for Window. This would be gradual 5-7 year process, allowing creative windows users to migrate to Mac. Even after that Apple may continue selling non-pro versions of these soft.
A basic math discounting a revenue from selling Windows product is too primitive.
Think how much these worth:
I don't thing Apple would immediately stop developing for Window. This would be gradual 5-7 year process, allowing creative windows users to migrate to Mac. Even after that Apple may continue selling non-pro versions of these soft.
This isn't the plan advanced by this writer, but even so, it is still not plausible that Apple could replace the entire purchase price within two years, which is their claim, let alone the 70% loss in revenue which would have to be made up, later if not sooner. All from software sales? Perhaps not, being very optimistic. But being even slightly realistic, the huge risk involved becomes apparent.
All big mergers are risky; few work out as planned. Adding onto that inherent level of difficulty the risk of having to replace most of the revenue the acquisition produced, turns it into a virtual impossibility. AAPL would be slammed immediately by investors and for years afterwards if they ever tried to pull a stunt like that. The doubts over their ability to make it work would be enormous, and for good reason.
I don't thing Apple would immediately stop developing for Window. This would be gradual 5-7 year process, allowing creative windows users to migrate to Mac. Even after that Apple may continue selling non-pro versions of these soft.
A basic math discounting a revenue from selling Windows product is too primitive.
Think how much these worth:
There seems to be some "thrill" over the idea of Apple buying Adobe. Despite writers denying it, it's more of a " Take THAT Adobe, you traitor!" kind of an attitude, rather than a good business sense for it. The reasons presented are simply wrong in their assumptions, or just plain flaky.
There are assumptions about migration that aren't all that well understood. Adobe makes products that other companies make in a number of areas. Why the assumption that those customers would migrate to Apple, rather than to other software while keeping their PCs? It's a bad assumption. CS5 is only a part of Adobe's portfolio. It's not as though Quark doesn't still have the majority of publishing content makers, because it does. This could drive more into their camp, damaging CS5 sales considerably.
Apple doesn't need to own PDF, and would likely not want the headache of keeping the millions of users updated, and upgraded. They couldn't want to get into the arguments about PDF security either.
Apple is trying to depreciate Flash, why would they want to own it?
It would also take years to integrate the two companies, with many, if not most of the top people at Adobe leaving over that time. This is consistently ignored in the arguments, but is one reason why most big mergers work out poorly. The companies cultures will be too different. We look at Apple's purchase of PA almost two years ago as something great, but shortly afterwards, the top people, the very people that posters here were so excited about Apple getting, left. That would happen here as well.
There seems to be some "thrill" over the idea of Apple buying Adobe. Despite writers denying it, it's more of a " Take THAT Adobe, you traitor!" kind of an attitude, rather than a good business sense for it. The reasons presented are simply wrong in their assumptions, or just plain flaky.
The advocacy for Apple taking over Adobe seems to come from two camps. The first, as you say, are the revenge motivated. This of course is bad business. The second is the CS users who are perennially annoyed by Adobe's half-hearted commitment to Mac products. I can almost understand that reasoning, or I could if I thought that Apple's future was somehow lashed to CS. At one time this might have actually been true, but I can't see how that argument can be made today.