Adobe Systems, Inc. (ADBE)

minorgod (85.18) Submitted: 9/22/06 6:15 AM : Start Price: $37.40 ADBE Score: 14.42

If you know anything about the publishing, computer graphics or internet content creation worlds, you may have noticed that Adobe recently dispatched their one and only competitor by merging with them. Adobe has effectively cornered the marked on every form of media creation except film and audio/video (though they do quite well with AfterEffects in some segments of A/V production). Among the market dominating products now in their portfolio are:

Photoshop-the defining program of an entire generation of computer graphics professionals and enthusiasts. Copied by many, equalled by none.
Illustrator - If your company has a logo and it wasn't designed in Photoshop, it was designed in Illustrator.
PostScript - The technology that drives almost every laser printer on the planet. They invented the technology. They own it.
PDF - The defacto standard for sharing digital documents that can be reproduced identically on any platform. After a long, slow journey through the backwaters of the publishing world and the internet, PDF is finally picking up the steam it needs to be and accepted standard, and profitable enough to annoy Microsoft into coming up with an alternative. Don't expect Microsoft's alternative to catch on, PDF is here to stay for both technical and historical reasons.
Flash - the standard for vector based animation on the web, and increasingly used for video (YouTube and Google Video both use it) distribution on the web. Once, just an annoying excuse to waste bandwidth, Flash is becoming a full-fledged development platform that will increasingly be showing up on cell phones, PDAs and other mobile devices as the demand for media-rich content increases worldwide.
Dreamweaver - Those who don't hand code web sites use Dreamweaver. Many of those who do hand code their web sites use Dreamweaver. The only remaning competition for this venerableweb page editor, Microsoft Frontpage, is only used because it comes with MS Office and Visual Studio .NET, whose users just don't know any better.

Aodbe has scores of other products, but these are the really important ones, the ones that will ensure that Adobe keeps laying golden eggs for many years to come. They effectively have no competition whatsoever in the various segments they currently dominate. Add to this, the fact that changing web standards will increasingly demand a whole new suite of standards-compliant development tools to fuel the growth of the internet. We will be looking at must-have upgrades for the majority of the web's content creators within 3 years. I don't see any way Adobe could possibly do anything but profit over the next 5 years, unless they totally mismanage several key products over a long period of time. They are as entrenched in their industries as any software company can be. There's somtimes a Google waiting to come out of nowhere and steal an industry from the big boys, but not often and not today.

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