Cringley’s always a good read, often a good chuckle. Today he posits Apple will buy Adobe. Great headline, but not likely. Cringley likes to write about Steve and Bill, and his other schoolyard chums, but those guys still have to answer to their boards. And why would Apple’s board want Adobe?
Adobe’s stock has been flat for two years. It’s quite possible its core content creation market is near saturation. The margins on software upgrades are nothing like the margins on new licenses.
Adobe’s a smart company. It will do fine as it reinvents itself. That’s why Adobe’s going into the IP video space (Adobe Media Player) and software over the web space (Buzzword) with such energy.
So let’s go to the charts. It’s apparent that Apple is on a roll, and that if it had $20+ billion in spare change, that it would likely want to buy the next big thing, rather than the last big thing. I’m not saying that Adobe’s best days are necessarily behind it, but Apple could surely find something cheaper with as much upside potential.
Cringley doesn’t make his case well with the old “the Mac is the dongle” argument.
Some readers may know what a dongle is. For those who don’t, a dongle is a sort of electronic key that plugs into a PC to enable the use of some expensive software application like AutoCAD. Each copy of the app comes with a single dongle so you can put the software on as many computers as you like but only one — the one with the dongle installed — can function at a time. Dongles, which are rarely used today, were an early and quite effective form of copy protection. Apple uses a variation of the dongle technique for its professional applications, but in Apple’s case the dongle IS the computer. Yes, the software is a good value but you have to buy a computer from Apple — a dongle — to run it on. So Apple runs its professional application business effectively at breakeven, making its profit on the associated hardware.
If that’s all Apple is doing with ProApps, running it at break even, then why the rumors that Apple was entertaining bids for the unit? Apple doesn’t think of itself as a computer company any more. It’s a consumer electronics and media distribution company these days (that happens to make a hell of a personal computer). iPods and iTunes sell way more Macs than Final Cut Pro. So that argument is a little thin.
In a perfect world, Apple would love to control Photoshop, Illustrator, InDesign, After Effects, and Flash. But it’s highly unlikely it will pay all that money to do so. Does it really want to support all those enterprise clients with Acrobat?Interesting read, but I’m confident Adobe will remain independent for some time to come. I think it’s more likely Adobe would buy ProApps.