Creative Suite - A masterstroke.
indar kumar is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
With the technology growing so fast that everybody has to be on their heels. Adobe Systems (NASDAQ: ADBE) certainly takes this thought seriously and it has a wonderful way to update technology, not just of its own but also its allies.
The newsmaker.
The company recently came into news when it announced the latest version of its software. Adobe recently issued a statement that the most recent version of its inspirational design and distribution products, Creative Suite 6, will be the last one to support a Windows XP operating system. This means that Adobe effectively is doing away with systems that are old and outdated. It is hedging away old Microsoft products and companies which rely on it much to the delight of Microsoft (NASDAQ: MSFT)
There has been a vibe about Microsoft’s acquisition of Barnes and Nobles which was a smart way to promote and popularize Windows 8. It was also an initial move to compete with the users of Sony, Samsung and iPads.
Now thanks to Adobe, the new introduction would act as a catalyst to Microsoft’s goals. While Adobe has made no talk about of altering the operating systems attuned with Acrobat, its elimination of XP as a backer of Photoshop and other Creative Suite products will be huge in the web and material design industry. This means good news for both the companies: - Adobe is already a strong performing stock, closing last week at around $33.30. This declaration will have two – folds effect. First, it will offer a boost in stock recital for Adobe, as sales will increase for consumers wanting to invest only in CS6 software and not upgrade their entire OS. On the other hand Microsoft is expected with its own roll outs, such as Office 365 and other editions of its tablet devices.
Twist in the Tale.
Now, Amazon.com (NASDAQ: AMZN) is the largest seller of e-books. It controls around 60% of the market in USA where e-books are concerned. Also it is one of its traditional and specialized business platforms. The point is, most of its e-books come in the prevalent and user friendly format of a PDF or EPUB documents - both by Adobe. This as is evident is a masterstroke from the software maker. This also could mean bad news for Amazon whose “Kindle” tablet is brought to death by the hands of Wal- Mart. The OS the tablet uses would not support the new format and an up gradation would be required – meaning further loss of sales and poor stock performance.
Where is it heading?
Affiliation between hardware manufacturers and software developers are the means for structuring the digital market. The procedure divide for operating systems is the percentage of which operating systems are used in certain computers. This is where Microsoft takes it all. More than 90% of all personal computers and laptops are built in with an Microsoft OS (Windows XP, Windows 7, etc). An estimate gives us that 21% of all OS sold used windows XP. The latent earnings impact on Microsoft is phenomenal. Whereas most developers prefer the advanced quality systems that comes with a Microsoft platform for FTP and web development, they will now be looking for a machine that is well-suited with the web design suite of choice - Adobe's Creative Suite. Microsoft will now be compelled to move ahead with operating system upgrades, or jeopardize impacts on that 21 percent.
The Final Word.
It is certain that the announcement from Adobe will bring joy to both companies as it will only result in further profits. This move from Adobe is well thought of and perfectly implemented. Microsoft the industry leader is capable to foresee the market and will respond likewise. Hence, it will result in positive performance for both corporate leaders.
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indarkb has no positions in the stocks mentioned above. The Motley Fool owns shares of Amazon.com and Microsoft. Motley Fool newsletter services recommend Adobe Systems and Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
