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Analyst: Photoshop CS3 to drive Mac sales

updated 11:00 am EST, Wed January 24, 2007

Photoshop CS3, Mac sales

Adobe's forthcoming Photoshop CS3 release will have a sizable impact on Apple's professional Mac sales, according to Piper Jaffray senior analyst Gene Munster, amounting to roughly 15 percent of the Cupertino-based company's sales. "We believe that the CS3 contribution from current Adobe creative pro customers points to 9 percent upside to our fiscal year 2007 earnings-per-share estimate of $1.45," Munster said. "This analysis is conservative given it excludes any customers outside Adobe's current user base." Adobe Photoshop CS3 -- which is expected to launch in late April -- has garnered positive feedback from numerous beta testers, 71 percent of whom said they were 'very satisfied' with the software and 17 percent of whom said they were 'satisfied.' "The beta is solid," the analyst said. "We believe that the success of the Intel-optimized CS3 will drive sales of Apple's pro-level computers, as Adobe creative pros (15 percent of the Mac user base) are waiting to buy Intel machines until CS3 is released." Piper Jaffray maintains its 'outperform' rating on Apple shares with a $124 price target.

The research firm gathered data from 83 Photoshop CS3 beta testers on the Web, revealing that 88 percent described their experience as either very satisfied (71 percent) or satisfied (16.9 percent). "There were no negative responses," the analyst wrote.

Munster believes that Mac market share can grow by 1 percent in 2007 based on the release of Photoshop CS3 and several other catalysts. "This rise would represent an increase from an average market share of 2.4 percent in calendar year 2006 to about 3.5 percent in calendar year 2007," said Munster. "Our estimates currently assume Mac market share of 2.5 percent in calendar year 2007." The analyst adds that an increase in Mac market share to 3.5 percent would lead to an upside in Piper Jaffray's calendar year 2007 earnings-per-share estimates of $0.44, or 14 percent.

by MacNN Staff





  1. Ben Lawson

    Joined: Dec 1969


    The Adobe Bottleneck

    Adobe's software seems to be a choke-point for Apple's Pro sales. Maybe Apple should buy 'em and make sure this doesn't happen again.

    Hmmm. Apple has a six billion cash reserve, Adobe has a market cap of 23 billion. Guess not without some complicated structured deal...

  1. John the Geek

    Joined: Dec 1969


    Almost perfect...

    > "There were no negative responses,"

    That's because CS2 runs so slow on Intel Macs that ANYTHING they could have done is better. I agree with the positive comments though, it's pretty solid for a beta. Now if they would just optimize more so all 4 cores on my Mac Pro were in use and get over the 3GB RAM they would be perfect.

  1. suhail

    Joined: Dec 1969


    Photoshop is not enough

    Few people work with Photoshop alone, Adobe would have to also compile Dreamweaver, Illustrator, Flash, and the notoriously slow InDesign.

  1. corsair

    Joined: Dec 1969


    PSCS3 optimization

    optimize more so all 4 cores on my Mac Pro were in use

    Photoshop work isn't like 3D where you feed a few numbers and it can calculate after that. Huge numbers of bits must be shuttled constantly to and from the CPUs. There are long discussions of explanation out there on the Adobe user forums and blogs about how so many operations in Photoshop are limited by memory bandwidth and disk I/O such that the 4 cores can't be fed fast enough. The cores wait for the Mac to transfer the bits. It's a hardware bottleneck.

    And contrary to popular belief, these problems aren't solved by 64-bit computing. It's actually the other way around. Those problems have to be solved at the hardware in order for 64-bit computing to become more practical.

    So maybe there were no negative responses...from users who actually understand how it works.

  1. jeph4e

    Joined: Dec 1969



    Adobe sucks. Should not have bought Macromedia. Bad deal for everyone...

  1. danviento

    Joined: Dec 1969


    Also consider

    the fact that most Photoshop users expected this update to come. Certainly PS CS2 is a smidge slower on Intel, but when you need a new machine, you need it. Of course, to some it would just be an excuse to put it off and wait for the faster models.

    To the comment earlier about using the whole CSuite, professionals besides graphic artists are prone to use Photoshop as a stand alone for final graphic presentation. For instance, architects (such as myself) would do any line work in CAD apps, not Illustrator, and the many other comparable alternatives to CS apps. I just wonder what the total user base figures would show for that kind of stat.

  1. doctorpeace

    Joined: Dec 1969


    percent vs. percentage


    An increase in market share from 2.4 percent to 3.5 percent is not an increase by 1 percent. It is a 46 percent increase.


  1. macnorway2000

    Joined: Dec 1969



    ...they have almost $12 billion in the bank as per the last financial call. Hostile takeover, anyone?

  1. G4_Kessel

    Joined: Dec 1969


    "Apple Photoshop"

    ...does have a nice ring to it. As long as they didn't call it iPhotoshop. That brings me to another point... they need to change the name of iTunes. Since it no longer is just music... it's music, videos, tv shows, movies and games. Maybe it should be called iMedia or something. I dunno... food for thought...

  1. Terrin

    Joined: Dec 1969


    Not correct

    Actually, if you paid attention to the last quarter results you would know that Apple had a cash reserve just shy of 12 billion dollars. Not that that matters, as most big company purchases and mergers are done with stock, not cash.


    As to the first comment, Adobe is not at fault here. Apple out of the blue told developers that it was switching to the Intel platform. It told these developers that the consumer line would not finish the transition until late 2006, and the pro line would take until late 2007. To Apple's credit, it finished this move way ahead of this announcement (a year ahead of time).

    It is not like Adobe can just rewrite millions of lines of code over night. Moreover, it did not make sense for Adobe to update CS2 when it was already working on CS3, which always was going to ship in 2007. I am amazed that Adobe has integrated Macromedia products with its own so fast. Moreover, it is bring new Mac applications such as Premier back to the Mac. Adobe does some crappy things, but credit should be given where due.


    ""Adobe's software seems to be a choke-point for Apple's Pro sales. Maybe Apple should buy 'em and make sure this doesn't happen again."

    "Hmmm. Apple has a six billion cash reserve, Adobe has a market cap of 23 billion. Guess not without some complicated structured deal...""

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