Adobe's Market Share in Creative Software Declining

Adobe(ADBE) had around 43% share in the creative software market as of 2009.

We estimate creative software (Photoshop, Dreamweaver, Flash Professional, InDesign) accounts for more than 50% of the Trefis price estimate for Adobe's stock. We currently have a Trefis price estimate of $38 for Adobe's stock, about 36% above the current market price of around $28.

Higher market share would help Adobe compete better with Apple(AAPL) and other creative software makers like Quark and Corel.

Historically, Adobe's market share has fluctuated around 45% to 50% due to the timing of software product release cycles. Creative Suite 3, which was released around the first quarter of 2007, was successful because of Adobe's acquisition of Macromedia allowing it to add Flash and Dreamweaver for the first time ever.

The company's creative software market share has decreased from 48% in 2005 to 43% in 2009 due to IT budget cuts and reduced advertising budgets that trickle down to negatively impact creative professionals in the marketing industry.

The average of Trefis member forecasts for Adobe creative software market share indicate a decrease from around 51% in 2010 to 47.5% by the 2016, compared to the baseline Trefis estimate of a decrease from 46% in 2010 to 44% by the end of the Trefis forecast period.

The member estimates imply an upside of 4% to the Trefis price estimate for Adobe's stock. However, continuous pricing increases of its creative software suites can limit Adobe's market-share growth.

Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Adobe's stock to Adobe creative software market share.

Our complete analysis for Adobe's stock is here .

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Trefis members constitute more than tens of thousands of users of the Trefis platform, inclusive of investors, financial analysts, and business professionals who use the Trefis platform to create their own models and price estimates.

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