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Wed, 07 Mar 2007 Apple could yield $900m from Adobe CS3 launch

The release of Adobe CS3 will drive up pro Mac sales

Gregg Keizer, Computerworld (US online)

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Apple will profit from the launch later this month of Adobe's first design suite built from the ground up for Intel-based Macs, a financial analyst said on Tuesday.

Adobe confirmed that it will launch its CS3 bundle, which includes Photoshop, InDesign, Illustrator and other tools, on 27 March. The company called it "the largest software release in Adobe's 25-year history".

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The current CS2 version of the suite relies on Apple's Rosetta emulation technology to run on Intel-based machines. CS3, however, will run on Intel Macs in native mode, offering a corresponding boost in performance.

CS3 also has a major halo effect for Apple, said Gene Munster, a senior research analyst at Piper Jaffray. "Since CS3 will be optimised for Intel Macs for the first time, many pro users have been waiting for this launch to upgrade from their PowerPC-based systems," he wrote in a note to clients.

Munster said that a 2006 survey of Mac users in the creative fields put the estimated market for Adobe's top-of-the-line tools at three million users. Assuming a 15 per cent upgrade rate by those users to a new Intel-based Mac Pro or MacBook Pro machine, Apple will likely sell an additional 450,000 systems based on CS3 alone.

"These additional units would also boost margins, as the high-end Mac Pro and MacBook Pro models carry higher margins than the rest of Apple's computer line," Munster said. At the bottom end of the scale, 450,000 more MacBook Pros sold would translate into a $900 million in revenue for Apple.

Although Adobe said on Monday that it would actually ship CS3 "later in spring 2007", Munster pegged the release at around 21 April, three weeks after the 27 March launch. Three weeks is Adobe's typical launch-to-ship time frame, he said.

In an email, Munster also dismissed talk by other analysts that Apple will debut the next Macintosh operating system, Mac OS X 10.5 Leopard, this month. "We think Leopard will be [in the] May time frame," Munster said. "I don't know where this March talk is coming from."

Leopard was touted last August by Apple CEO Steve Jobs at the company's worldwide developers conference, but the operating system was a no-show during Jobs' presentation at the more recent Macworld conference in January. At that event, all attention was focused on the upcoming iPhone.

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