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The Birth Of Acrobat And Adobe’s Screw-ups

ababFor a company that typically shies away from preannouncing products, Adobe Systems Inc.’s recent formal unveiling of its Acrobat document-interchange technology seems a little out of character.

While almost everyone agrees that Adobe is working on an important technology, the hoopla over the announcement turned out to be little more than a public relations effort.

Yes, Adobe unveiled the formal name of the technology — Acrobat — performed a “live” demonstration and announced two components, Acrobat Viewer and Distiller, which will be delivered within six months. But the Mountain View, Calif., company has previewed the technology, code-named Carousel, publicly for the past year, so most of this was not news.

As one Adobe official put it, “This was meant to bring the uninitiated up to date.”

So why the big splash for a technology that has been public knowledge for quite some time? The answer may well be that Adobe is feeling the heat from Microsoft Corp. and from cloners of its PostScript page-description language (PDL), and this was its attempt to divert the focus.

“We are at a crossroads,” said one Adobe official, who did not want to be identified. “We are definitely being hurt by Microsoft on the font front and the clone vendors on the PostScript [front].”

Adobe has dominated the font business with its Type 1 product for some time, but Microsoft, as it has done in many other arenas, has jumped in, gunning for a piece of the business.

When Microsoft rolled out Windows 3.1 earlier this year, the company included its own TrueType font technology in the operating environment, firing a direct salvo at Adobe.

Microsoft’s TrueType push is off to a good start — largely because the company is giving away 13 free typefaces with its Windows 3.1 operating system.

In other words, Microsoft is telling the average user, why pay for fonts when you can get them for nothing. Adobe sells its Adobe Type Manager font package for $99.

Microsoft is betting that users will find it hard to wean themselves of TrueType fonts once they get used to them. When they are ready to become serious font users, more than likely, they will turn to the Redmond, Wash., software giant’s retail font packages, priced at $69.95.

“The writing is on the wall for [Adobe’s] Type 1,” said Rob Auster, vice president of electronic printing at market-research firm BIS Strategic Decisions in Norwell, Mass. “Microsoft is putting nearly a million copies of Windows in the market, which means TrueType is going to be the de facto font standard.

“Adding insult to injury is the fact that Hewlett-Packard [Co.] is bundling TrueType with its [LaserJet 4] printer,” Auster added.

He cautioned, however, that Type 1 is not going to go away overnight.

Clones hurt PostScript business

Adobe is also not doing too well on the PostScript licensing front, where it has made most of its money. It has been registering only modest gains in revenue mainly because of the proliferation of PostScript clones.

“The clones are very reliable. … There’s no longer a stigma attached to them,” said Auster. “The PDL market is absolutely price-driven, and vendors will pick and choose [based on the price].”

Adobe has to drop its royalty fee if it wants to compete in the marketplace, Auster added.

Adobe, of course, is not sitting idly by — it has signed several licensing deals with IBM, Lotus Development Corp. and Compaq Computer Corp. for its font technology.

Also, Adobe has typically serviced the serious, high-end users, who will probably stay with the company. But it has to realize it can squeeze only so many dollars out of that niche.

So what does the future hold for Adobe? Most observers believe Adobe faces difficulties with its current core business, but they see a silver lining in the Acrobat technology.

For example, Piper Jaffray, an investment firm based in Minneapolis, boosted its stock recommendation based on the Acrobat announcement.

“[Acrobat] is the second making of Adobe. If they are successful, it will be a huge win for them,” said Jonathan Seybold, publisher of the Seybold Report on Desktop Publishing, a newsletter published in Malibu, Calif.

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