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Adobe Unveils Applications Software Platform

Bill Snyder

Adobe Systems(ADBE Quote) will release an early version of a new software platform on Monday aimed at extending its reach on the Internet.

Apollo, as the platform is called, allows applications to run on desktops that had run only within a browser.

Although there is some advantage for users -- photos, for example, are easier to edit and prepare for upload via a desktop application -- the real benefit to Adobe is the opportunity to sell more software tools to developers and to get a piece of the action when an Apollo-enabled application is used to buy something or handle other types of transactions.

Apollo, says Michele Turner, the company's vice president in charge of platforms, is part of a long-term strategy to broaden Adobe's revenue base. Apollo, for example, is compatible with Ajax, a new, popular development language. Older Adobe platforms were not compatible. That means Ajax software developers can now use the company's tools and write applications to Apollo, creating new revenue opportunities for Adobe, Turner says.

Adobe is also developing an Apollo-enabled Internet TV application dubbed Philo -- after Philo Farnsworth, the father of broadcast television -- that will allow content providers to push customized video feeds to customers via RSS or real simple syndication.

Adobe expects to ship a final version of Apollo, which will be free to consumers, by the end of the year.

The Apollo release comes a day before Adobe announces first-quarter earnings and a little more than a week ahead of the release of one of Adobe's flagship products -- Creative Suite 3.

Analysts polled by Thomson First Call expect Adobe to post EPS of 29 cents on revenue of $655 million on Tuesday. That compares with earnings of 32 cents a share and a nearly identical revenue figure a year ago. The relatively soft quarter is not surprising, because revenue and earnings tend to be sluggish the period before a major new product ships, notes Goldman Sachs analyst Sarah Friar.

She said "the upcoming CS3 product cycle represents, in our view, the most significant product cycle in the company's history." She expects the company to match EPS estimates and perhaps do a bit better on the revenue side than Wall Street projects. Her company has an investment banking relationship with Adobe.

On Friday, Adobe closed with a gain of 55 cents, or 1.4%, to $39.17