Adobe stock drops hard- Is Google waiting to catch them?

Posted on September 22, 2010

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You can blame lower sales of PC’s. Slumping demand in the US and Japan, but lets face it, Adobe stock went up earlier this month when Apple loosened its grip on APP development for mobile devices and would drop restrictions on what programming tools developers can use to create iOS apps. A move that was expected to open the door for users to use tools from Apple’s rivals — most notably Adobe’s Flash — to build software for Apple’s iPhones, iPads and iPods.

Heck, everyone has been talking about getting Flash on iOS for a while, everyone but Steve Jobs, that is. Well in every crisis there is a silver lining, I guess. In Adobe’s case, look out for Google (they do want to rule the world, ya know).

Adobe’s focus on Google’s Android operating system might be the key to future growth, as a slew of Android-equipped phones are set to hit the market this year. The popularity and growth of Android may work out in Adobe’s favor. And of course, Google is going after Microsoft with Android against Windows, they are going into the browser arena with Chrome against Internet Explorer, might make Adobe a good acquisition target. Of course no one at either company is commenting.

Adobe, once the darling of the software world and close friend to Apple had a bit of a wake up today. Shares of Adobe Systems plummeted Wednesday after the software developer indicated that sales and earnings for its next quarter might fall short of expectations.

Adobe said late Tuesday that fourth-quarter profits, excluding one time items, would be in the range of 48 to 54 cents per share, while analysts were expecting 52 cents per share.

David Hilal, an analyst at FBR Capital Markets, pointed to the disappointing performance of Adobe Creative Suite 5, a product grouping that includes Adobe Photoshop and Acrobat, as a reason for concern.

“The uncertainty of demand from these markets led management to provide lackluster guidance and makes us lower our expectations,” Hilal wrote in an analysis, citing a lack of demand in both Japanese and domestic education markets.

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Posted in: Google