Avid Technology plunges as Apple soaks up consumer enthusiast market

“Back in early February, shares of Avid Technology jumped sky-high on a seemingly terrific earnings report. That’s when I started a bearish CAPScall on the maker of software for media production,” Anders Bylund writes for The Motley Fool. “‘I think investors will wake up from this euphoric jump to find that Avid’s long-term prospects don’t measure up,’ I said. ‘Focusing on margin growth without destroying the underlying business is very, very hard. It’s a risky turnaround plan.'”

“Today, Avid is proving me right,” Bylund writes. “The company just published preliminary results for the first quarter. $152 million in sales fell far below the $160 million expected by Wall Street analysts. Management sees a GAAP operating loss of $15 million, which would be the weakest result since the spring of 2009… I feel pretty good about my call on Avid today as shares plunged more than 17% in after-hours action [yesterday]. At these prices, Avid has taken a 60% haircut over the last year and I’m pretty sure we haven’t seen the worst of it yet.”

Bylund writes, “The culprit of Avid’s disappointing numbers is a 30% year-over-year drop in sales to the enthusiast market… Apple is presumably stealing Avid’s enthusiast customers by the bucketload with its own desktop software, but also with the iPad product line that looks more attuned to media creation with every new iteration.”

Read more in the full article here.

MacDailyNews Take: Here’s a bit of what our own SteveJack wrote shortly after Apple debuted Final Cut Pro X:

Is all the noise we’re hearing today really coming from Final Cut Pro users who still have their previous Final Cut version(s) and already know how to properly and rationally submit feedback to Apple?

Or is it coming from non-Final Cut Pro users who see the $299 writing on the wall and realize that they’ll soon very likely have to learn something dramatically new and different from outside their comfort zone? Apple’s previous Final Cut Pro versions have not stopped working, nor has Apple stopped work on FCP X – in fact, they’ve just started working with a paradigm-shifing, extremely strong and powerful foundation upon which to build. Have a minute of patience, please. I heard the same sort of whining when we went from Mac OS 9 to Mac OS X and some had to be dragged kicking and screaming. People stopped crying over Mac OS 9 in short order, too.

Or who perhaps some editors feel a little bit threatened that “non-pro” users will be able to edit so well for so little? And/or perhaps it’s coming from Apple’s now price-demolished competition who simply cannot crunch their numbers and make them come out profitably if Apple is going to offer Final Cut Pro X for $299?SteveJack, MacDailyNews, June 24, 2011

Related articles:
PC Magazine reviews Apple’s Final Cut Pro X 10.0.3: Editors’ Choice for high-end video editing – February 7, 2012
Apple significantly updates Final Cut Pro X – January 31, 2012
TV producer Bunim/Murray Productions drops Apple’s Final Cut for Avid editing software – January 4, 2012
Apple releases Final Cut Pro X 10.0.2 Update – November 17, 2011
Editor Walter Murch is feeling better about Final Cut Pro X – November 8, 2011
Apple releases major Final Cut Pro X update; debuts free 30-day full version trial – September 20, 2011
Film editor: Apple’s Final Cut Pro X is flexible, powerful, incredibly innovative software – September 12, 2011
Gartenberg on Final Cut Pro X: Why Apple dares to change your apps – July 17, 2011
IT Enquirer reviews Apple’s Final Cut Pro X: Very much a professional’s tool – July 8, 2011
Apple to allow additional Final Cut Pro 7 enterprise licenses; FCP X improvements coming soon – July 7, 2011
Former Avid employee on Final Cut Pro X: Only Apple seems capable of pushing boundaries – July 5, 2011
Why Apple built Final Cut Pro X – July 1, 2011
PC Magazine: Apple’s Final Cut Pro X makes serious leaps and bounds past its predecessor – June 30, 2011
Shake product designer explains Apple and Final Cut Pro X – June 29, 2011
Apple answers Final Cut Pro X questions; promises multicam editing and more – June 29, 2011
Change.org petition demands that Apple not change Final Cut Pro – June 27, 2011
Final Cut Pro X ‘backlash’ coming from competitors scared to death over Apple’s $299 price tag? – June 24, 2011
Conan blasts Apple’s new Final Cut Pro X (with video) – June 24, 2011
Answers to the unanswered questions about Apple’s new Final Cut Pro X – June 23, 2011
‘Professional’ video editors freak out over Final Cut Pro X – June 23, 2011
Apple revolutionizes video editing with Final Cut Pro X – June 21, 2011

29 Comments

  1. “but also with the iPad product line that looks more attuned to media creation with every new iteration.”

    but, but… the iPad is a CONSUMPTION device. No one will ever be able to create content on it…!!!!!

    1. Right, right. That “consumption” line is so old now that even the haters have dropped it, now that pilots, radiologists, coders, CEOs, and presidential candidates are usin’ iPads: and the haters realize these types ain’t playin’ Cut the Rope on them.

  2. GOOD! After those bastards bought Wizoo only to discontinue their products they left a lot of users hanging. Oh and by the way, Protools sucks!

  3. But are we admitting there is a difference between the enthusiast, who with Logic, Aperture, or Final Cut can produce terrific work, and the professional, who needs ProTools, Photoshop, and Media Composer/CS6/Smoke/Edius (and workstation quality hardware) to take it to the next level? Last year Larry Jordan said we’ll all be using FCPX in 18 months (Dec 2012). Not even he says that anymore.

    (Final Cut brought me back to the Mac years ago, and for that I am thankful. After trying FCPX since its release, I’ve recently moved on to Adobe CS. I just hope the hardware stays up to par.)

    1. Maybe there is no next level and among those enthusiasts that couldn’t afford all of the high end tools from the past are some true geniuses waiting to spring forth. That said, the way you get good at anything is practice, practice, practice, something the pros have been doing for years. They’re probably safe, even if they have to learn a new piece of software.

  4. Dinosaurs fall hard; die hard deaths.

    Rabbits keep running.

    High prices can not be maintained over time. Look at the evolution of any product. Someone does it better and cheaper.

  5. I’ll say it again.

    The legacy systems are there and will continue to be the mainstay of the old guard simply because man’s reluctance to change and the costs to associated with it.

    Having spent literally 10’s-100’s of thousands of dollars building their studios, training and developing a protocol of expertise, makes it extremely difficult to throw it away and literally start all over again.

    But the new generation and the schools that train them, are not going to pass up the new paradigm which allows them to enter the industry with a integrally more functional and powerful tool at significantly more modest costs.

  6. Pro Tools is the most overrated software on the planet that forces you to do all final mixes in REAL TIME. Yes. Pro Tools sux, big time!

    Too bad that Bias abandoned development of Deck years ago. Until the loss of Rosetta killed it, Deck was a wonderful alternative to Pro Tools for many years that freed you from the drudgery of real time mixes.

  7. Avid abandoned the Mac market (per MS’s demands) in the late ’90’s. Avid made their bed; let them lie in it.

    They can rot in h*ll, for all I care. Good riddance.

  8. At first I was flummoxed at the prospect of Final Cut X. Then we serialized that it was indeed the future. We still continue to produce the vast majority of our content in Final Cut Studio. But as the new product becomes more capable, as our hardware gets more in line with the requirements of the modern environment, we see ourselves turning to Final Cut X as our future. It’s not ready now, but soon will be. Avid has its place. But soon that place will be diminished.

    Finally, it’s not the software/hardware that makes an editor. It’s talent.

    1. Thought it was pure arrogance, accordin’ to what I read here a while back. Now that the smoke has cleared somewhat, thanks for pointing out that what FCX was, was an evolutionary step up.

      In every construct of a certain age, it seems to reach a point where you have patches on patches on workarounds, time to spring for a fresh bolt of muslin and sew up a new suit of clothes, instead of Insistin’ to your customers that Scarecrow is still the “in” look

  9. FCPX will continue to improve and add additional features. It will take some time, because FCPX was a total rewrite and redesign of complicated software. But the writing is on the wall.

    The iPad reference is interesting, since FCPX doesn’t run on iPads (yet). But it will someday.

Reader Feedback

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