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.