Adobe and Apple is it all over

Adobe upped the ante in the war of brinkmanship with Apple yesterday with the announcement of Contribute 4. At first glance it seems that Adobe has released a product that fully supports both the Macintosh and PC, but further investigation reveals that the major release is a potential ‘broad swipe’ at Apple.

Over a year ago on June 6, 2005 Apple announced that it would move to replace PowerPC chips as its core CPU and switch to using the industry standard Intel chip, which every other PC uses. On January 10 this year Apple launched the new Intel based computers onto the market.

In order to facilitate the transition to the new Intel platform Apple released an update of its developer software that would allow companies like Adobe to ship updated versions supporting both the older PowerPC chips and the newer Intel chip Macs, called a Universal Binary application. For apps that haven’t been re-developed and shipped as Universal Binaries, Apple has created an emulator called Rosetta which converts PowerPC code into Intel code as the program runs – the problem is that the emulation runs very slowly on graphical applications.

At the launch of the new Intel based Macs in January Mr Jobs was noted to say in his keynote "The Performance of Photoshop in Rosetta isn’t going to be powerful enough for a professional … it’s fast enough for those of us who use it occasionally”

This was perceived as a public rebuke to Adobe for not ‘coming on board’ with a Universal Binary version.

Photoshop is one of Adobe’s flagship programs, but allegedly sales on the Mac side have been stalling as users wait for the Universal Binary version. Adobe has indicated that this may not be released until next year, a full year and a half after the announcement of the Intel switch.

Meanwhile, Apple has released a major update of Aperture, its professional photographic production workflow program, beating Adobe to its own game, in its core market. Adobe has a similar program Lightroom, but it’s still a beta release and isn’t likely to go commercial until next year, by which time Apple will have established itself firmly in that market.

So, some see the delay of Universal Binary versions of software in the Apple market as being a way of punishing Apple for entering its core market. And sending clear signals to Apple that it is not happy with the situation. Certainly the release of Contribute 4, a major update, and not providing support for Apple’s new platform indicates one of two things, either Adobe lacks the skills and engineers to carry out the transition, or perhaps that it will not move to Universal Binary apps for anything but its core applications.

Adobe is caught in a trap of its own making, the market is clamoring for an updated Universal version of Photoshop, but Adobe now makes its cash by selling Photoshop bundled with other apps as well – under the CS2 brand – to release Photoshop CS 2.5 and not release the others would create brand confusion. At the same time many users would not expect to pay much for the update unless there were added features – speed is not considered a feature. Compounding this lack of revenue stream is the fact that many large users have licensing agreements, so any interim releases will not generate any revenue. Hence, customers are told to wait for CS3.

We think that this is a serious miscalculation by Adobe, although Apple only has less than 4 percent of the global PC market share, it is estimated that they represent between 40 and 50 percent of the shipments of Photoshop. Apple customers are remarkably loyal to Apple and if Mr. Jobs feels forced into going ‘head on’ with Adobe over Photoshop releasing an Apple equivalent then the market for Photoshop would likely collapse in a few months. Apple already demonstrated that the technology built into new Macs with Quartz Extreme and Core image would make developing a similar product to Photoshop trivial for Apple.

What Adobe CEO Bruce Chizen needs to understand is that although in the past Apple was very reliant on Adobe for applications, today Apple is a very different beast. With the rewards it has reaped from its entry into the media software application business Apple is on a roll. Furthermore, Apple’s new found confidence will not stop it from entering traditional ‘no go areas’.

Any loss in the media market will be for Adobe, not Apple.

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