Apple could rake in extra $900M after Adobe CS3 launch

A lot of would-be hardware buyers have been awaiting the release

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

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

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 & Co. "Since CS3 will be optimized 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 3 million users. Assuming a 15 percent 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. The Mac Pro starts at US$2,499, while the MacBook Pro notebook sells for US$1,999 and up. At the bottom end of the scale, 450,000 more MacBook Pros sold would translate into a US$900 million in revenue for Apple.

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

In an e-mail, Munster also pooh-poohed the 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 in January. At that event, all attention was focused on the upcoming iPhone.

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Gregg Keizer

Gregg Keizer

Computerworld
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