Should Apple buy Adobe as leverage against Microsoft?

“If Apple buys Adobe, is the operating system market up for grabs? It doesn’t take a brain surgeon to see why. Borrowing heavily from Mr. Cringely’s terminology, there are several industry realities and stories, each having its own vector/trajectory that might lead one to seeing the importance of Adobe to Apple’s well being. Adobe owns key graphic sector applications. Meanwhile, Microsoft has a strangle-hold over Apple with Office for the Mac. Were Apple to buy Adobe, it would give Apple the leverage it needs to ensure Microsoft keeps making Office for the Mac,” John Kheit writes for The Mac Observer.

“Make no mistake, Apple is much like Blanche DuBois; it relies on the ‘kindness’ of Microsoft. At any given time, all Microsoft has to do to put Apple down like a sick pony is stop making Microsoft Office for the Mac,” Kheit writes. “Right now Microsoft will not do that for a slew of reasons, e.g., antitrust issues, Microsoft makes a boat load of money on sales of Office to Mac users, etc. Nevertheless, were it to become threatened as Apple transitions into more markets, Microsoft will not hesitate in pulling the plug on Office, and down the tubes Apple will go.”

Kheit’s “transitions” include:
• Apple’s ‘iWork’ office suite, which Apple is developing “at a glacial pace”
• Apple and Intel: the target is Windows
• Apple Media dominance: iPod+iTunes, potential future CE products

Kheit writes, “Were Apple to buy Adobe (and what the heck, maybe Quark), it would own enough key applications necessary to Windows users to thwart Microsoft. Should Microsoft threaten to pull Office from the Mac, Apple could then threaten to pull the Adobe products from Windows. This would be bad for both companies, and basically get them into a big ole game of mutually assured destruction (or at least mutually assured losses of revenue). Could Apple do this? Sure it could. Adobe’s market cap is around $17 Billion. Apple has well over $7 Billion in cash and its market cap is over $60 Billion. Apple has enough cash and stock for a buyout. And if Apple purchased a majority stake, the stock would soar for both companies; you might even see a dip in Microsoft stock. That would be a home run for Apple.”

Full article, an excellent, thought-provoking read, here.
Is Microsoft Office really that critical for Apple Mac? Seriously, would Apple’s Mac platform just up and die without future versions of Microsoft Office? Apple would have to stop doing promotions like this: Get Microsoft Office for up to 50% off when you buy a new Mac at the Apple Store, but doesn’t the Mac have a lot more going for it besides the ability to run Microsoft Office? Anyway, Apple would gain Photoshop, Dreamweaver, Illustrator, Flash, etc. if they bought Adobe. It would be a blockbuster deal, that’s for sure. What do you think?

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Related MacDailyNews articles:
Adobe to acquire Macromedia in $3.4 billion stock deal – April 18, 2005
Apple and Adobe go to war – March 26, 2003
Adobe prefers (and promotes) PCs over Macs – March 24, 2003

113 Comments

  1. MDN: “Is Microsoft Office really that critical for Apple Mac?”

    Yes.

    In my field (astrophysics) the number of Macs has grown exponentially since OSX. There’s a good reason for this, we like to use UNIX based machines as all our analysis software runs under UNIX. However we also need to use Microsoft Office.

    The fact that Macs can do both without the need to dual boot or run some software thats not fully compatible with Office (e.g. OpenOffice) is huge.

    Office also gets the Mac’s foot in the door in professional settings.

    If Microsoft dropped Office for Mac it would be a disaster, and the “MDN take” is very short sighted in believing otherwise.

  2. This article is right on the money. The ability to run Office (which is better on a Mac than on Windows, by the way) is what makes Macs competitive and tolerated by the predominantly Mac-unfriendly IT staff at large companies, universities, etc. It is only because Mac users can still open, modify and share Office documents that they (we) are able to co-exist, despite the anti-Mac attitude.

    I work at a large University Medical School. I could get by without Office for many things that I have to do, such as writing letters, simple documents, etc. However, when I write NIH grant applications I need to embed photographs and drawings into the text of a very large and complicated document, and at the SAME TIME, I need to also manage a very large bibliography. The bibliography tools that are available (e.g. EndNote, BookEnds) work with Word, but do not work with Pages. Other text editors do not allow image embedding. Furthermore, the NIH provides the blank grant applications only in Word (.doc) or PDF formats. The latter can’t be filled in, so is pretty worthless. Thus, the Word files become the standard.

    There are similar issues with the other Office programs. Powerpoint is the de facto standard. I use Keynote when I can (and always get comments about how beautiful my presentations look), but if I have to share my file, or if I have to make a presentation somewhere in a lecture hall which has a Windows machine connected to the projector, I have to convert it to Powerpoint. I have learned to use my Macs effectively and efficiently, but I have to do so in a world that is dominated by Windows.

    I couldn’t do what I do using a Linux machine or Open Office. I can only get by because I can use and create Office documents on my Mac. If Office for the Mac were to go away, I would really be in a bind and might have to switch to Windows.

  3. “This is idiotic. First off, Office as it is, is already a bloated mess, trying to be too much to too many.”

    Don’t underestimate the importance of Office. Regardless of criticism, it is the life blood of the majority of PCs on the planet. “Business” runs on Office. Mac without Office becomes a total write-off in business, including Marketing and Advertising departments where it is grudgingly allowed to exist. Even those departments must co-exist and communicate with the rest of the organization. Without Office, you will see Macs tossed out of businesses in wholesale fashion.

    Apple must have an Office type suite that is fully compatible with Office file formats to have a chance to fully take on M$.

  4. Also, don’t underestimate the antitrust issue. If Microsoft pulled Office simply because Macs were getting more popular, they would face a massive antitrust suit.

    That sort of activity is illegal, and would not exactly be subtle. All the time the Mac Business Unit makes money for Microsoft they dare not close it.

  5. If Apple wants to compete against Microsoft, it would sell OS X for Intel without proprietary computers. OSX is of equal or greater value than Windows XP Pro which retails somewhere around 200 plus dollars. Apple sells OSX intially at 99 per license for 90 days and then sells it for the regular 129.00.

    In the meantime, Apple can spend the money they might have spent on buying Adobe and invest in developing better applications the Adobe sells. ie Premiere versus IMovie.

    Done.

  6. “is MS Office for the Mac critical?”

    Heck yes!

    It is my number one coversion argument for Windows users that consider the Mac regardless of whether is/isn’t a good app. If it wasn’t Apple wouldn’t use it as one of its 10 top reasons to consider a Mac.

    Most Windows users could care less about iWork and OpenOffice. Try to convince a Windows user to come to the Mac so that they can use OpenOffice…..they’ll laugh at you.

    It is absolutely necessary in the corporate environment.

  7. ^^ “But seriously, who de hell cares about what Gates and his rim jockeys think?”

    Good one, T-Dog.

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  8. JJ:

    Hostile Takeover: In the world of mergers, the acquisition of one company by another against the wishes of the company being acquired. Also termed a hostile acquisition, this is accomplished by purchasing controlling interest in the stock of the acquired company, usually by offering to pay a price exceeding the current market price. A hostile takeover might be motivated to eliminate competition, to sell off the assets of the company for more that the takeover payment, or to temporarily inflate the price of the stock.

  9. Is Microsoft Office really that critical for Apple Mac? Ummm… YES!

    Another short-sighted, idiotic and most of al,l childish take from MDN.

    MDN takes remind me of a five year old running around the house singing “Na-na-na-na-na”

  10. I agree completely with pog, but for slightly different reasons. For better or worse, Word is the de-facto standard for collaborative writing in the social sciences. With parallel versions of Office for Mac/Windows, it is rarely necessary or relevant to know a collaborator’s operating system, so even in heavily Windows-dominated environmens Mac users can work productively and can escape the scornful looks of 10+ years ago when cross-platform collaboration was more cumbersome. It seems likely that MS would ensure that any 3rd party “office-compatible” programs would have just enough glitches to prove the point. MS’s play is not self-evident, though, because many of us in dual-OS environments still need a few industry-specific Windows programs and have no easy solution for running them without buying a cheap Dell box (Wine & VPC are not viable) for everyday use. If MacIntel’s are reasonably easy to dual-boot, MS stands to sell both Windows and a copy of Office to a large segment of the Mac-hardware market.

  11. For one, Cringely, would NEVER recommend Apple buying Adobe. Didn’t the author read Cringely’s blast at Adobe, becoming fat and lazy and useless a month or two ago?

    Second, how does buying Adobe help Apple kill off MS Office?

    This is just nonsense.

  12. As has been so well pointed out often on this site:

    APPLE IS A HARDWARE COMPANY, DICK!

    Why would they ever violate their own business model by purchasing a software company? Guess you can’t always believe what an Apple zelot says.

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