Why Apple Should Acquire Adobe

Honest to god, if there are two companies that better make “a couple” than Adobe and Apple I sure can’t think of them. Here’s three reasons why Apple should acquire Adobe:

1) Photoshop. The entire family of products defines a category that defines the Mac platform. There is speculation that the reason Mac Pro sales have been slow is that CS3, the Universal Binary version, wasn’t available until recently. If there ever was a modern “killer app” this would be it.

2) PDF. Apple did more to promote PDF than anyone, I love the fact that it’s integrated into the OS and could see this becoming a universal doc format for Apple even more tightly integrated.

3) Apollo. I’ve seen some of the early Apollo stuff and it was hot. This has the potential to completely redefine what it measn to be a web application because it makes the web browser optional. Tightly integrated into the OSX while at the same time offering support for Vista would give users yet another reason to buy a Mac, and still offer Windows users some cake and that means web developers would find the environment very attractive. Apple could easily give Apollo away for free to anyone who wants to develop for it. Imagine what they could do with the iPhone and Apollo!

And for a bonus, here’s one more:

4) Adobe Connect. This is the Breeze product from Macromedia and it is by all accounts a seriously good online collaboration/meeting tool. Microsoft has been doing really well with Placeware and the recently announced acquisition of Webex means this sector is far from tied up. Apple needs a good remote presentation tool and this is it.

UPDATE: I forgot to mention that APPL has $12b in cash and growing, they need to do something productive with that before it becomes a drag on their balance sheet.

UPDATE2: Baron.vc has a counterpoint post worth reading.

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16 thoughts on Why Apple Should Acquire Adobe

  1. Pingback Why Apple Should Not Acquire Adobe at Baron VC
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  4. Thanks so much for the link back. I appreciate it as a long time reader.

    I noticed that this post seems splintered into duplicates (the one above it).

  5. How will this help Apple sell more hardware? Apple is a hardware company, don’t forget. Yes, they make software, too, but it’s core competency is to make “insanely great” tangible objects and sell them at approximately 22% profit.

    Everything else is smoke and mirrors designed to sell more boxes.

    The only reason to buy them would be to keep Microsoft from buying them and killing Mac development. Otherwise, Apple benefits from everything on your list because (someone other that itself) is developing for the platform. A healthy platform sells more boxes.

  6. There’s no reson for Apple to acquire more than 20% of Adobe. That and a seat on the board would be plenty to assure that Adobe won’t take the Mac for granted.

  7. I love it!

    I would love for Apple to purchase Adobe.

    This would make sure Apple has control over the creative computing world. Apple would then have products covering graphic design, to photography, to web-based design, to print technology, to film and music. Apple would be a formidable software company. Apple would insure that it gets the best in creative software before the PC World would have it.

    Apple use to own part of Adobe. It was a big mistake to sell it’s shares of Adobe off in the past.

    Now that Apple is big enough, it can purchase all of Adobe.

    Apple learned with Steve Jobs that it has to create its own software to insure its destiny. It cannot rely on third parties to support it all the time – particularly with the larger Windows market causing Apple to get second tier in software development.

    Acquiring Adobe would insure Apple gets first tier software in it’s largest area of dominance – the creative field.

    I think it would be a fantastic move for Apple.

    Taking Adobe would certainly lock Microsoft out of the creative market.

    It would also give Apple enormous influence in determining the future of the web and internet.

  8. Since when is no debt and $12 billion a drag on Apple’s balance sheet?

  9. Just ask any of the institutional investors or analysts that cover the stock. Having a great big pile of cash sitting in money market accounts isn’t doing the shareholders any favors, they expect you to be investing that cash in activities that produce a greater return than simply sitting on it. This is exactly what drove Microsoft to issue their first ever dividend…

    To abstract the issue to another level, that $12b in cash belongs to the shareholders of the company, not the CFO and Steve Jobs. The legitimate question to ask is what are they doing with it.

  10. To answer your question even more directly, it’s a drag on the balance sheet because it pulls down their ROE. It’s highly unlikely that they will generate a greater return by investing it in the market than in operations and if they did, well that would be an entirely different issue to face.

  11. Agree on APPL. The company that should really be buying ADBE is GOOG. . .

    – huge cash balance sheet dragging down ROE
    – single app/service company trying to build a platform
    – dire need of diversification
    – highly accretive
    – brings some rigor to their prod dev process
    – good kick in the nuts of MSFT (pardon my french)
    – move beyond the browser which is owned my MSFT
    – dis-intermediate the user from the desktop (which is also owned my MSFT)
    -Huge synergies with Google “Office”
    -Additional distribution points for adsense
    -Bringing advertising to the desktop!
    -PDF = information . . . imagin owning the “WSDL” for a huge portion of the data in the world
    -cant do the semantic web or oganize the world’s information without controling PDF

  12. that’s a really good point Will. In thinking about it, I would be surprised if GOOG pulled a big infrastructure or tools acquisition, even though they certainly could afford the $30-35b it would take to acquire Adobe.

    To date their largest acquisition has been Youtube, I believe… content and traffic.

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  14. I think the key is actually Apollo/Aire. This is a vastly underdiscussed game changer. I have written many times about the war for developers and Apple fails miserably. They could basically buy 1000’s of flash developers immediately and start to really compete on the desktop app side with Microsoft.

    That said, Apple has NEVER understood this so why think they will now.

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