Adobe plans to float on AIR next year

The publisher plans to follow up the best revenue year in its history with a major push for its Web services development environment, in an effort to shore up Flash's chances against Silverlight.

Adobe Systems Inc. is on a roll. In its quarterly conference call last night to announce record yearly revenues of $3.16 billion, Adobe officials said it plans to make available the commercial release of its emerging AIR Web development environment next year, along with other new products.

The company also pointed to particularly strong software sales of its Creative Suite 3 on the Apple Macintosh side.

Fiscal year 2007 was Adobe's biggest year in history, ending with a 21% net profit increase in Q4 year-over-year to $222.2 million, on 34% higher revenue annually to $911.2 million. Double-digit sales increases were reported across virtually all Adobe business segments, including creative, enterprise, development, and knowledge worker software, said Adobe President and CEO Shantanu Narayen.

Adobe also experienced a more modest sales increase of 4% for its mobile software.

Officials said they expect the sales momentum of the past year to continue into 2008, driven by factors that include strong sales performance last year of Creative Suite 3, particularly on the Macintosh side, and huge opportunities for Flash and its forthcoming AIR development platform among the 76% of Web sites that stream content over the Web and the 37% that are broadcasting video content.

"Our focus remains on AIR," according to Narayen. Setting next year as the commercial release date for the development environment, Adobe's CEO said that the product will allow Web developers to work in HTML, Adobe Flash and Adobe Acrobat, "without the constraints and limitations inherent in Web browsers."

"Next year" is a broad release date even by competitor Microsoft's standards, but that's what we have to go on for now.

Although the platform hasn't yet entered commercial release, a number of major players, including eBay, Yahoo, QVC, and the NASDAQ stock exchange, are "already building next generation systems" with AIR, he said.

New releases of existing products are on tap, too, for 2008, according to the officials.

Also, noted Narayen, Nokia and NTT Dokomo last year announced intentions to incorporate Adobe's Flash Lite mobile software into their mobile devices.

Adobe is planning some new product rollouts for the third quarter of next year, to help circumvent the traditionally slow sales for that quarter.

"Those should allow us to finish strong," Narayen said, during a Q&A session at the close of the call. But he declined to elaborate on the upcoming products.

"One of the things we've learned is that for competitive reasons we don't want to share product information well ahead," the CEO said.

Nokia and NTT Dokomo have already announced intentions to incorporate Adobe's Flashlight mobile software into their mobile devices, Narayen noted.

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