ADBE vs AAPL

Eighteen months ago, John Paczkowski speculated that Apple may want to use their considerable war chest of cash to buy Adobe. Adobe is currently worth around $18 Bn and Apple has around $30-35 Bn in the bank (Apple themselves are, at the time of this writing, worth $215 Bn. This is why I think Apple … Continue reading “ADBE vs AAPL”

Eighteen months ago, John Paczkowski speculated that Apple may want to use their considerable war chest of cash to buy Adobe. Adobe is currently worth around $18 Bn and Apple has around $30-35 Bn in the bank (Apple themselves are, at the time of this writing, worth $215 Bn.

This is why I think Apple has been maintaining such a strong position against Adobe over the last two years. They’re trying to reduce the stock price (as well as maintain control over a platform).

Adobe made less than half a million dollars in income last year and has been increasing it’s debt. We know in comparison that Apple has no debt at all and reported $3.38 billion in profits last quarter (Apple will release their next quarterly results in about two weeks).

[UPDATE: The figures are in thousands so I’m out there. But it means the debt is in thousands as well which puts them about a billion in debt.]

@webtwozero writes:

@cimota why would apple buy adobe? they don’t like flash, which pretty much rules out director too, they after photoshop, and premiere?

They’re after Photoshop, to adopt it in. They’re also after Premiere and Lightroom, with a view to either enhancing or replacing Final Cut Pro and Aperture. I think they’re also after Acrobat, Flex, Flash I reckon they have no good intentions towards them.

GodsWearHats writes:

@cimota AAPL vs ADBE: I don’t think Apple wants them, tbh. Doesn’t strike me as Steve’s style.

They’d already done something similar to the music sector when they purchased eMagic and made Logic Mac-only. And they did the same with Nothing Real and Shake.

Lomifeh writes:

@cimota I don’t really want them to buy adobe. The companies seem too dissimilar in philosophy. I’d prefer them forcing adobe to act right

To my mind, Adobe made their bed when they stopped feature parity on the Mac with the Windows version. They still haven’t rectified this and as a result Apple and Mac users have been treated like second class citizens. On top of that, the use of Flash in video undermined QuickTime, Lightroom undermines Aperture and it’s possible they see Premiere as a competitor to Final Cut Pro.

Adobe has also dragged it’s feet on the releasing apps which take advantage of Mac OS X technologies and there’s no way that Apple would permit Adobe to control access to their OS features the way they already have manipulated the market with Flash. Adobe was one of the major reasons for Carbon due to their reluctance to rewrite their application portfolio in Cocoa – something which still hasn’t been done after ten years of Mac OS X.

If Flash is the real bone of contention here then I’ll be very surprised. Flash video has always been little more than a hack – a compatibility layer that locks video into a proprietary format for later display. the poor performance of Flash on Mac hardware underlines the need for Apple to react. While I may lament the loss of many excellent education and entertainment games which have been developed in Flash, the truth is that many of these games simply will not work with a touch-based interface. They use a lot of facilities such as ‘hover’ which is possible with a virtual cursor but not possible with a touch interface. As a result, running Flash-based games and education tools on the iPad or iPhone would result in a substandard experience with poor performance and in both cases Apple would shoulder the blame.

Is it any wonder that Apple now feels they have to take a strong position.

That said, I feel that last night’s presentation on iPhone OS 4 was a rush-job, meant to try and stop a drama from turning into a crisis. If Adobe had announced CS5 officially and then demonstrated it and Apple had refused to stock the apps in the AppStore, then it would have been bad for both. I do think, on the other hand, that Apple is being curiously heavy handed here.

28 thoughts on “ADBE vs AAPL”

  1. You must not know how to read a balance sheet, o ‘King of FUD’.

    Total ‘Current Liabilities’, as defined by Investopedia (link: http://www.investopedia.com/terms/c/currentliabilities.asp) are short-term debts usually paid off within the fiscal year. So, they actually have over a billion in debt (~1.5 billion in case you’re too lazy to figure it out).

    That is not my point, however, but rather, have you ever thought about where the $1B in long-term debt came from?

    You might want to check this link out [insult removed].

    http://www.wired.com/techbiz/media/news/2005/04/67259

    Read the second-to-last paragraph/sentence (oh you have to love Wired and their literary geniuses.) It has to do with the $1B stock-repurchase plan which was to be executed after the sale of Macromedia to Adobe.

    Wait for it… Wait for it….

    [insult removed]

    Ha, and I bet you won’t have the sack to post this in its entirety either. I just wanted you to know that I know that *you* don’t know WTF you’re talking about.

    Lates

    Thomas

  2. I must say, being chastised by someone who uses The Dude as their twitter avatar has to be a new low.

    Their income trends are down, their debt trends are up. And as I said on Twitter, I’m tired of the Adobe thing.

    The technical reasons for not supporting Flash far outweigh the economic reasons.

    You don’t detail your personal interest in Adobe, in fact, you don’t detail a lot, but to be honest I am tired of the whining. Adobe have been cunts for the last decade with regards to Mac users. I’m glad to see them caught out.

  3. @Matt Johnston (i.e. INSULT REMOVED)

    That’s your only rebuttal? That my avatar on Twitter is ‘The Dude’ (and by the way The Dude abides…)

    You really are p…INSULTS REMOVED

    [ EDIT: see, one of the best things about running my own blog is that I don’t need to sit and listen to nonsense like this. There’s zero content other than insults and no real interest in a discussion about the technical merits or demerits. Now, I tend to allow stuff on my blog which disagrees, which is even infmalatory but I’m not really interested in your rampant fanboism. Go be a fan of Adobe somewhere else.

    The Dude may abide but you, Thomas, are not the Dude, no-matter how much you may WISH you were. ]

  4. @mj

    We may have gotten off on the wrong foot, ha…

    So, you think you actually want to discuss technical merit, or in your opinion, lack thereof?

    You stated the following:

    “Their income trends are down, their debt trends are up.”

    So, what’s your point? Did you take the time to look at Apple’s financials? Their debts are also trending upwards. Does that necessarily indicate the health of a company? I didn’t think so…

    What I’ve noticed about the statements you’ve made is they’re far-reaching and your reasoning is flawed. You arrive at conclusions based on what is often times very loosely and sometimes unrelated factors/reasons.

    Having something personal against a company is one thing, but this is ridiculous.

    By the way, I own two MacBook Pros, I am a Java/Flex/FOSS developer since you wanted to know what my personal interests were.

    T

  5. You’re obviously not a finance guy… so, let me help you out…

    http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=6855302-248606-252982&type=sect&dcn=0001193125-09-214859

    Under Item 8. -> BALANCE SHEET (their caps, not mine)

    Their total non-current liabilities are ~$7B. Need I say more? I’m beginning to worry about the state of your mental health if you continue with this ‘Apple have [sic] no debt…’

    Love always,

    T

  6. There’s obviously a discrepancy, but guess what… the only figures that matter are the ones filed with the SEC (e.g. 10-K, 8-K etc).

    I also take it that you’re not a strong reader, as ‘mrq’ stands for ‘most recent quarter.’ For the newly initiated (i.e. you) this means they incurred no new debt in Q4 ’09. The filing I referred you to was the filing for Oct ’09 (Apple’s 10-K/Annual Report) hence what you pointed out on your deftly clever screen grab means…

    zero

    You should seriously consider not continuing to refute my statements. It’s just making you look stupid.

    Oh, and ‘this one is good too’…

    http://ycharts.com/companies/AAPL/debt_equity_ratio

    .51 is the magic number for Dec 09

    Good talk Russ…

    T

    1. So I asked someone knowledgeable and qualified to check for me – because I still wasn’t seeing this massed debt that you were describing. To have a look at the 10K and see what was there – to challenge Apple’s own public and accepted declaration that they have no debt.

      “Its a mix of deferred revenues, accounts payable, tax and warranties – all stuff that you would expect. In real terms, they appear to have no debt.”

      So, they have no debt. Can we move the fuck on now? Or do you want an auditors certificate.

  7. I think you’ll find this accounting discussion would be resolved if you defined your terms. Liabilities are current (must be paid within a year) and long term (may be paid after a year). Long term liabilities can be calked long term debt, or used by non-accountants as simply debt. And it this element (AFAIC) that is used in all debt related financial ratios.

    You’ll notice of the 13B in Total Current Liabilities 6B are Accounts Payable … ie bills received but not paid yet. Since the Balance Sheet is a snapshot of the financial state at a point in time, and Apple, like most big companies pushes their payables out, that’s not con sided by accounts as real debt. Similarly for the Accrued Expenses. Without delving into what they’ve lumped into Other Current Liabilities, can’t tell.

    Also there ARE zero Long Term Debts or other obligation outside the current year, so in reality the way to state thing is “Apple has no debt, but it does have some bills outstanding”

    The analogy would be if you had no mortgage or any other loans, but ran up a bill on your credit card that you paid off every month.

    /d

  8. “They use a lot of facilities such as ‘hover’ which is possible with a virtual cursor but not possible with a touch interface.”

    That’s the worst argument against Flash support on an iPhone I ever heard. I’ve been developing touch interfaces in Flash for years.

    CSS supports ‘hover’ doesn’t stop me using ‘websites’ on my ‘iPhone’.

    pfft.

  9. This guy says it best…

    From DZone:

    “Sometimes it takes a bigger jerk to get another jerk to get off of their proverbial arse. This looks to be the case with Steve Jobs castigating Adobe.

    Adobe has been a lazy steward of Flash technology. If Apple had only prohibited Flash from their devices I could perhaps understand it. But they’ve also locked Java out of their devices. What’s your excuse for Java, Steve?

    The draconian prohibitions that you’ve put on your mobile devices far exceed the concerns you’ve expressed here about Flash. You’ve screwed developers, and most importantly your customers, with your megalomania. And you’ve really opened the door for Android, something I like very much.

    The way to grow is to encourage developers to use your platform, not to try to dictate to us. ”

    What now mj? I’d like to see your response to this…

  10. Jesus, Thomas, didn’t you learn when you argued about the debt?

    OK. It’s very simple. Java on the desktop has been pretty shit. Java on mobile has not been better.

    The best excuse for Java is the deployment of Java on any Mac in the past, ever. While Java performance on Mac OS X was excellent a few years ago (around 10.2,10.3), Java apps were always second class citizens as they had poor implementations of the UI. So there’s a UI issue.

    Secondly, as Steve mentioned in the open letter, when you open the platform to other “translators” and other IDEs, then you end up only getting the lowest common denominators on your platform. You end up waiting for whomever is maintaining the translator to get with the program.

    What are you losing when you bar Java from your platform?

    Swing?

    Boke.

    Or something like this? http://news.cnet.com/i/bto/20080815/LWUITtwo.bmp

    Not really losing a lot, guys.

  11. @mj

    Coming from you, a person who would appear to barely understand ‘Assets = Liabilities + Stockholder’s Equity’, yes you could say I didn’t learn much from the last discussion. But, educating you in accounting is something for which I have neither the time nor the interest. Anyway, all you would **probably** do is scurry off and ask one of your so-called **”friends”** about what I was attempting to teach you and tell me I was wrong. Additionally, just to settle the discussion on Apple’s debt, just because a company doesn’t have any debt that is financed, doesn’t mean they don’t have debt. Why don’t you sleep on that and let the grown-ups talk about the finer points of a company’s SEC filings…

    Moving on…

    *”OK. It’s very simple. Java on the desktop has been pretty shit. Java on mobile has not been better.”*

    You make such generalizations, do you have any **recent** examples of Java applications on the desktop which are ‘shit’? Any **recent** examples of Java apps on mobile devices? Yeah, didn’t think so…

    *”Java performance on Mac OS X was excellent a few years ago (around 10.2,10.3)…Java apps were always second class citizens as they had poor implementations of the UI. So there’s a UI issue.”*

    First, would you care to join us in the 21st century? Secondly, someone, such as yourself, who tends to deal in absolutes might want to rethink that second statement. Do you have anything useful to contribute about any relatively recent Java apps? Again, didn’t think so…

    Also, regarding your link, for every ugly Java mobile app you site I can find an iPhone app which is nearly as bad/ugly, buggy or both.

    So, thanks for playin’ mj, it’s been a real treat…

    [insult about my mother removed]

    T

  12. Thomas, by your reckoning, any company that pays salaries in arrears has ‘debt’ because they owe employees for those hours they have worked. That’s not the same as debt in any realistic or accepted sense of the word.

    Java apps on the desktop in Mac OS X have pretty much died off. There’s not many of them and with good reason. Java does well on the server and that’s a good place for it. I honestly can’t remember the last time I used a Java app.

    On mobile, I’ve had plenty of experience running Java apps on Symbian and Blackberry. Are you seriously suggesting that these apps are competitive with what can be seen on iPhone? And good lord, yes, there are some ugly iPhone apps but pretty apps on the “Java-like’ Android platform are few and far between.

    Java is the ultimate compromise on the desktop/mobile. When a dedicated Java-like environment (like Android) is architected, then they can get things right but for the most part it’s a solution for mediocre apps which take none of the advantages of the platforms into account.

  13. @mj

    Is there a point somewhere in your rebuttal? All I hear from you is rhetoric like ‘Java is the ultimate compromise’ but with nothing really to back it up. Let’s put Objective C under the same scrutiny as you have with Java. Tell me another mobile hardware platform which supports Objective C. Yup, you guessed it… they don’t exist. So, do you divert resources, time and energy to a single platform (i.e. iPhone/iPhad) or do you try your hand at something which is about as close as you can get to a write once/run anywhere SDK? That’s a pretty big stretch there my friend to go with the former…

  14. Supporting Java gives you a common denominator experience. This is bad.

    Supporting the native language on a platform with the native frameworks gives a native experience. A better experience.

    Had a quick poll on Twitter. No-one could think of a good Java app on desktop. That’s the sort of experience we want on our mobiles, obviously.

  15. Java on the desktop – failed. JavaWebStart was never really going to take on the world.

    J2ME in terms of numbers – win!
    In terms of user engagement – failed.

    JavaFX – too little too late. Looks nice but the developer community aren’t fooled by another scripting language that looks like it was hurried together. The JavaStore hasn’t materialised, it was Jonathan Schwartz last real cockup before Larry came wading in.

    Swing was bad, JavaDesktop never took off. The only thing that would save Java in it’s current state is Android development. Now that Oracle essentially own Java you’ll see a drift by the hardcode developers move away. To put the nail in the coffin James Gosling left Oracle.

    Java’s real key is still in enterprise. It’s all over the place (like Cobol was (and still is) !)

  16. @mj

    You’re probably going to laugh at this, but have you forgotten about Eclipse? Yes, I know it’s an IDE but it is Java and a damn fine FOSS Java application at that.

    I’ll concede the fact there are very few ‘good’ Java desktop applications for OS X. For mobile however, there have been some very entertaining games written in Java. Jamdat (now owned by EA) is one mobile game publisher that comes to mind who wrote most, if not all, of their games in Java. They had a bowling game and several others which were a lot of fun to play. Granted, were their games as visually appealing as some of the iPhone/iPhad games being developed today? Certainly not, but they were nevertheless entertaining.

    Which brings me to my next point: a framework/platform does not a ‘common denominator experience’ make; developers create the experience. Your reasoning is seriously flawed in stating ‘Supporting Java gives you a common denominator experience’. And as far as supporting the platform and its native frameworks, SWT does that just fine. Not that familiar with SWT’s mobile capabilities but I know there were some SWT mobile initiatives gaining momentum, albeit before Apple’s bombshell regarding section 3.3.1 of the new developer agreement.

  17. In the discussion on Twitter, Eclipse was the only good one mentioned. And even then, as you say, it’s a developer tool, not really a ‘desktop app’.

    Damian O’Suillibhean had a good point a few weeks ago about Section 3.3.1.
    As an experienced developer who wants the best out of a platform, you learn the tools for the platform, not spend time trying to hack a way to do it learning nothing.

    Supporting Java on iPhone will depend entirely on who has developed the compiler (which won’t be Apple). Your poor developer experience will hinge on how fast the compiler picks up support for the new APIs. In the past Adobe has been terrible about supporting new APIs (as Steve mentioned, it’s taken them 10 years to move to Cocoa).

    I can hardly blame Apple for blocking shitty Java Mobile apps.

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