Cringely: Why Apple will buy Adobe

Apple Store Canada“Steve Jobs has his Macworld keynote address coming and will no doubt deliver to us a few of the products we’ve all been predicting, presented with a level of showmanship simply not seen elsewhere in the industry. But my job this week is to look beyond products, to take a step back and give a long view of where Apple is headed. And the centerpiece of this analysis is my conclusion that Apple will inevitably buy Adobe Systems,” Robert X. Cringely writes for PBS.

“Folks a lot smarter than I have wondered over the years about potential Apple mergers and acquisitions driven by Steve’s bloodlust. Apple-Disney, Apple-Google, Apple-TiVo, even Apple-Sun come to mind, but the only one that makes any sense to me at all is Apple-Adobe,” Cringely writes.

“If such an acquisition were to take place it would have to be in 2008 while Avid and Microsoft still present credible competition to keep the Department of Justice and the Federal Trade Commission from opposing such a merger. It would go easier, too, on W’s watch. I knew he was good for something,” Cringely writes.

Full article here.

MacDailyNews Take: We’ve long hoped that Apple would buy Adobe and, since we love the ruthless Steve, begin phasing out Windows versions of applications a la Shake. At the very least, Mac users would get much more timely updates from Apple than from Adobe. That interminable wait for a Universal Photoshop really soured us on Adobe.

79 Comments

  1. Predrag, when companies acquire other companies, they rarely use cash to do it. Apple might put up 1 or 2B in cash (if any cash is involved at all) and then give Adobe shareholders the rest in Apple stock. So, they wouldn’t have to dip into their stash of cash to buy Adobe at all.

  2. I really don’t think many people understand the concept of a merger. When you do that it is to gain an advantage in market share or profitibility in that line of business. You don’t want to kill the market share by not making software for windows like mac-nugget said. Also, as mac-nugget said, how would buying adobe benifit apple if they cut windows out? It wouldn’t do anything but lose apple a lot of money.

    Don’t get me wrong, I have had a mac since I can remember, and it’s all i use outside of my work laptop, which is a dell. But I find it funny to see all of these “Mac addicts” “fan boys” etc etc talking about what apple as a company should do when they don’t even understand simple business models. A lot of what I read on this site is funny. Like someone suggesting apple should buy sony… That make a lot of sense considering sony is much much bigger than apple. Apple has it’s niche market with trendy technology and they are doing wonderful, why change that? Sure you want to make it better, and continue to grow in market share but why get away from doing what you are good at?

  3. Buy them or write their own Creative suite. Adobe has treated Apple customers as second class citizens for so many years. Yet treated Windows users as first class citizens. Apple should buy them or compete.

  4. To Mittens Romney,

    I totally agree and that’s exactly what I was thinking; someone further up (Jay-Z, I think) had suggested that Apple couldn’t buy Adobe even if they wanted to, since they don’t have enough cash to buy out Adobe’s outstanding stock. Apple would still have to dip into their own stash of AAPL in order to pay Adobe’s share holders, though.

  5. I agree with Jeremy. Can someone point out any example of when Cringley has been _right_ about apple? This won’t happen. Apple could much less expensively create a competing product if they wanted, and their primary concern with creating software is to make sure good software exists for the mac. There’s no chance Adobe will abandon the mac, unlike, say, MS Office which gives MS leverage over apple.

  6. Considering AAPL’s cash + market cap, a cash-stock deal may make a lot of sense and would not not necessarily have to deplete the cash hoard.

    Would acquisition of Adobe add shareholder value? You bet.

    Is it likely to happen? Maybe, maybe not.

  7. An Apple purchase of Adobe would be ok. I was thrilled when Apple bought eMagic though I would have liked Apple to keep producing and put some R&D;into the eMagic hardware produces for Audio Capture. The Other purchase that would make for a good fix with Apple would be Mark of the Unicorn. MOTU has some really great Audio and HD Video Capture/Processors products that would make a good fix for Logic (formally eMagic Logic) and Final Cut.

  8. If Apple were to buy Adobe, we can be thankful that Steve Jobs is much smarter than MDN.

    Pulling the plug on Windows versions of the various Adobe products would be buying a car and than ripping the quarter panels off: “Hey, lets gut the value of the company after paying $x billions of dollars to acquire it.”

    I for one would be so pissed that I would simply seek an alternative to Adobe products rather than be blackmailed into buying a Mac. There’s always an alternative.

  9. Jay-Z said: Adobe’s market cap is currently $22bn, roughly $7bn under Apple’s current rumored stash. I really doubt this happening any time soon.

    In a situation like this, it would be primarily a stock deal anyway without Apple needing to expend their cash to acquire Adobe. Stock for stock transactions are tax free and presumably the acquired asset(s) would balance the stock dilution so that Apple’s stock would maintain its pre-acquisition level or even rise due to perceived synergy. So don’t let the amount of cash that Apple has lead you to think it’s unlikely.

  10. Cringley makes me cringe. When was the last time he was right on anything Apple? C’mon Robert, have you never heard of the word “monopoly”? The merger would surely be blocked for the reason that Apple would control large parts of the design market.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.