Major Software Upgrade Further Simplifies Photography Workflows

Press Release: SAN JOSE, Calif. — July 29, 2008 — Adobe Systems Incorporated (Nasdaq:ADBE) today announced the immediate availability of Adobe® Photoshop® Lightroom® 2 software, the photographer’s essential toolbox for managing, adjusting and presenting large volumes of digital photographs. With new enhancements such as dual-monitor support, radical advances in non-destructive localized image

correction, and streamlined search capabilities, Lightroom 2 is a compelling upgrade that simplifies photography from shoot to finish. As Adobe’s first application to support 64-bit for Mac OS X 10.5 Macintosh computers with Intel® processors and Microsoft® Windows® Vista® 64bit operating systems, Lightroom 2 also provides improved memory performance for dealing with large scale images.

“A worldwide community of photographers provided valuable insight and feedback, as part of the Lightroom 2 public beta program, ultimately helping us deliver a better product,” said Tom Hogarty, senior product manager for Lightroom and Camera Raw at Adobe. “We’ve considered their requests which helped us develop useful features that make it easier than ever for our customers to quickly refine, enhance and present brilliant photographs.

Photoshop Lightroom 2: Smarter, Faster and More Accurate
The enhanced Library module in Lightroom 2 helps streamline and accelerate photographers’workflows. With the ability to visually organize images across multiple hard drives, Lightroom 2 and its powerful Library Filter Bar makes it easy for users to quickly find the images they need. The Suggested Keywords feature helps photographers keyword their images by making intelligent suggestions based on their own previous efforts. New dual-monitor support allows users to expand their workspace, giving them flexibility to edit and organize images in a way that maximizes an additional display.

In the Develop module, the new Local Adjustment Brush lets photographers fine-tune specific areas of an image to precisely adjust color, exposure and tonal range without affecting other areas of the image. The new Graduated Filter expands the toolbox in Lightroom, allowing for edits to larger areas by applying gradually diminishing or increasing adjustment effects such as exposure, clarity, and saturation, alone, or in any combination. Lightroom 2 also helps photographers print more efficiently by quickly arranging photos of multiple sizes on one or many pages with flexible and customizable templates to maximize paper and ink. Intelligent algorithms automatically determine optimal sharpening for screen or print, producing crisper images faster.

Developers can further extend the Lightroom workflow with Web, Export and Metadata Software Development Kits available at the Adobe Developer Connection, http://www.adobe.com/devnet/.

Ground-Breaking Innovation in Raw Technology
New raw technology gives photographers access to flexible camera profiles. Camera profiles are the visual starting point for the raw processing workflow, but image preferences vary for every photographer. To minimize surprises, Adobe is supplying default camera profiles that closely emulate the visual looks that photographers are used to seeing from their favorite camera, while also providing the ability to create highly customized profiles to suit different tastes. Camera profiles are available for immediate download on Adobe Labs (http://labs.adobe.com) for use with Lightroom 2 and Camera Raw 4.5, along with the DNG Profile Editor for the community to test and create their own profiles.

The Adobe Camera Raw 4.5 plug-in and DNG Converter 4.5 are also now available on Adobe.com and support over 190 camera models including the Olympus E 420 and E 520 models.

“One of the big reasons why Lightroom has become such a phenomenon among serious photographers is that Adobe built it with the input of a very vocal user community,” said Scott Kelby, president of the National Association of Photoshop Professionals (NAPP). “Adobe really listens to the issues and challenges today’s photographers face and they’ve built a complete solution that not only meets the needs of photographers; it really feels like it was made just for us. The enhancements to Lightroom 2, combined with the power of Photoshop, give photographers the ultimate freedom to produce professional images quickly.”

Pricing and Availability
Adobe Photoshop Lightroom 2 is available now through the Adobe Store at www.adobe.com/store in English, French and German with the Japanese language version planned to be released at a future date. The estimated street price is USD$299 for new users with an upgrade price of USD$99 for registered users of qualifying Lightroom customers. Recommended system requirements are Macintosh OSX 10.4, 10.5 1 GHz PowerPC G4 or G5 or Intel® based processor, or Microsoft Windows® XP SP2 or Windows Vista Home Premium, Business, Ultimate, or Enterprise, Intel Pentium 4® processor, 1 GB RAM and a 1024×768 resolution screen. Additional information on product features, upgrade policies, pricing, and language versions is available on www.adobe.com/products/photoshoplightroom/.

About Adobe Systems Incorporated
Adobe revolutionizes how the world engages with ideas and information –anytime, anywhere and through any medium. For more information, visit www.adobe.com.

© 2008 Adobe Systems Incorporated. All rights reserved. Adobe, the Adobe logo, and Adobe Photoshop Lightroom 2 are either registered trademarks or trademarks of Adobe Systems Incorporated in the United States and/or other countries. Mac, Mac OS and Macintosh are trademarks of Apple Computer, Inc., registered in the United States and other countries. Microsoft, Windows, and Windows Vista are either registered trademarks or trademarks of Microsoft Corporation in the United Sates and/or other countries. Pentium is a trademark or registered trademark of Intel Corporation, or its subsidiaries in the U.S. and other countries. All other trademarks are the property of their respective owners.

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New, Open Format Intended to Bring Predictability and Consistency to Digital Cinema Workflows

Press Release: SAN JOSE, Calif. and LAS VEGAS NV — April 14 , 2008 — Adobe Systems Incorporated (Nasdaq:ADBE) today announced that it plans to lead an initiative to define an industry-wide open file format for digital cinema files to streamline workflows and help ensure easy archiving and exchange. Adobe intends to leverage its successful Digital Negative Specification (DNG) file format as a foundation, and Adobe plans to work with a broad coalition of leading camera manufacturers, including Panavision, Silicon Imaging, Dalsa, Weisscam, and ARRI—along with software vendors, including Iridas and The Foundry, and codec provider CineForm—to define the requirements for an open, publicly documented file format that it plans to call CinemaDNG.

Adobe is currently working to develop the requirements of the CinemaDNG workflow and intends to subsequently publish a specification for the file format based on collaboration with companies throughout the industry.

“With the CinemaDNG initiative, Adobe is extending its leadership in developing open, interchangeable formats for digital still cameras into the realm of digital cinematography,” said Jim Guerard, vice president of Dynamic Media at Adobe. “By taking a proactive role and working collaboratively with leading digital cinema manufacturers, Adobe is helping to define an industry-standard approach that benefits the entire filmmaking ecosystem. Filmmakers will be able to adopt digital cinema cameras with confidence, and camera manufacturers will be able to provide specialized functionality while ensuring instant file format compatibility with existing workflows.”

Many filmmakers are foregoing film in favor of digital cinema cameras and workflows that offer improved creative flexibility, lower costs, and significantly faster turnaround times. However, those new workflows involve complex hardware and software, with projects passing through multiple vendors along the production pipeline. The proliferation of disparate, vendor-specific raw file formats has the potential to erode some of the advantages of digital cinema. By proactively leading the development of an open, public, and enduring standard that can be adopted throughout the production pipeline, Adobe and other companies through the CinemaDNG initiative are helping to solve an important, emerging workflow issue.

Advantages for Filmmakers
As a publicly documented and open file format, CinemaDNG would offer several advantages for filmmakers. They could avoid roadblocks caused by incompatibilities in workflows that involve multiple devices, vendors, and file formats. They could adopt digital cinema cameras while minimizing the risk that proprietary or camera-specific file formats would be unsupported in the future, because CinemaDNG would provide an open, durable, standard format that would be available for many years to come. Filmmakers could also rest assured that they have access to a robust archival standard for the new generation of raw-capable digital cinema cameras. CinemaDNG would also provide the foundation for an editing workflow that would allow filmmakers to use the highest quality source material.

Advantages for Manufacturers
For camera manufacturers and software developers, CinemaDNG is intended to help remove a key obstacle to the adoption of new products by providing reliable, instant compatibility with existing workflows. Manufacturers may be able to reduce development costs by eliminating the necessity to develop proprietary formats and conversion utilities. CinemaDNG is also planning to deliver support for proprietary metadata, helping manufacturers to differentiate their product offerings from competitors’.

“Experiencing a smoother, more streamlined workflow is, without exception, a good thing and open standards are a great way of accomplishing it,” said Bruno Nicoletti, chief technology officer at The Foundry, a leading visual effects software developer in London. “The Foundry supports Adobe’s plan for CinemaDNG, which will make the adoption of raw digital camera data much easier for everyone in our industry.”

“We are working hard on establishing a realistic and workable method of getting raw data from the camera to post,” said Marc Shipman-Mueller, product manager for Cameras & Lenses at ARRI, a top digital cinema camera manufacturer in Munich. “An industry wide standard for raw data can only help in this future oriented process that will provide multiple benefits for the users of raw data.”

About Adobe Systems Incorporated
Adobe revolutionizes how the world engages with ideas and information - anytime, anywhere and through any medium. For more information, visit www.adobe.com .

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Revenue and Earnings Performance Driven by Record Acrobat and LiveCycle Revenue

SAN JOSE, Calif. — Sept. 16, 2008 — Adobe Systems Incorporated (Nasdaq:ADBE) today reported financial results for its third quarter ended Aug. 29, 2008.

In the third quarter of fiscal 2008, Adobe achieved revenue of $887.3 million, compared to $851.7 million reported for the third quarter of fiscal 2007 and $886.9 million reported in the second quarter of fiscal 2008. Adobe’s third quarter revenue target range was $855 to $885 million.

“Our strong performance in Q3 was driven by record revenue for our Acrobat and LiveCycle products, as well as the overall diversity of our business,” said Shantanu Narayen, president and chief executive officer. “We continue to execute exceptionally well against our strategy, and we look forward to the launch of our flagship Creative Suite 4 product family next week.”

Third Quarter GAAP Results
Adobe’s GAAP diluted earnings per share for the third quarter of fiscal 2008 were $0.35, based on 541.3 million weighted average shares. This compares with GAAP diluted earnings per share of $0.34 reported in the third quarter of fiscal 2007 based on 597.3 million weighted average shares, and GAAP diluted earnings per share of $0.40 reported in the second quarter of fiscal 2008 based on 542.4 million weighted average shares. Adobe’s third quarter GAAP earnings per share target range was $0.34 to $0.36.

GAAP operating income was $219.5 million in the third quarter of fiscal 2008, compared to $255.0 million in the third quarter of fiscal 2007 and $260.2 million in the second quarter of fiscal 2008. As a percent of revenue, GAAP operating income in the third quarter of fiscal 2008 was 24.7 percent, compared to 29.9 percent in the third quarter of fiscal 2007 and 29.3 percent in the second quarter of fiscal 2008.

GAAP net income was $191.6 million for the third quarter of fiscal 2008, compared to $205.2 million reported in the third quarter of fiscal 2007 and $214.9 million in the second quarter of fiscal 2008.

Third Quarter Non-GAAP Results
Non-GAAP diluted earnings per share for the third quarter of fiscal 2008 were $0.50. This compares with non-GAAP diluted earnings per share of $0.45 reported in the third quarter of fiscal 2007 and non-GAAP diluted earnings per share of $0.50 reported in the second quarter of fiscal 2008. Adobe’s third quarter non-GAAP earnings per share target range was $0.45 to $0.47.Adobe’s non-GAAP operating income was $351.9 million in the third quarter of fiscal 2008, compared to $340.9 million in the third quarter of fiscal 2007 and $349.6 million in the second quarter of fiscal 2008. As a percent of revenue, non-GAAP operating income in the third quarter of fiscal 2008 was 39.7 percent, compared to 40.0 percent in the third quarter of fiscal 2007 and 39.4 percent in the second quarter of fiscal 2008.

Non-GAAP net income was $269.1 million for the third quarter of fiscal 2008, compared to $269.4 million in the third quarter of fiscal 2007, and $272.7 million in the second quarter of fiscal 2008.

A reconciliation between GAAP and non-GAAP results is provided at the end of this press release.

Adobe Provides Fourth Quarter Financial Targets
For the fourth quarter of fiscal 2008, Adobe announced it is targeting revenue of $925 million to $955 million. The Company also stated it is targeting an operating margin of approximately 30.5 percent on a GAAP basis, and an operating margin of approximately 39.5 percent on a non-GAAP basis.

In addition, Adobe is targeting its share count to be between 544 million and 548 million shares in the fourth quarter. The Company also is targeting GAAP and non-GAAP non-operating income to be between $6 million and $7 million. Adobe’s GAAP and non-GAAP tax rates are expected to be approximately 25 percent.

These targets lead to a fourth quarter diluted earnings per share target range of $0.39 to $0.41 on a GAAP basis, and an earnings per share target range of $0.51 to $0.53 on a non-GAAP basis.

A reconciliation between these GAAP and non-GAAP financial targets is provided at the end of this press release.

Forward-Looking Statements Disclosure
This press release contains forward-looking statements, including those related to revenue, operating margin, non-operating income, tax rate, share count, earnings per share, and business momentum which involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: delays in development or shipment of Adobe’s new products or major new versions of existing products, introduction of new products and business models by existing and new competitors, failure to successfully manage transitions to new business models and markets, failure to anticipate and develop new products and services in response to changes in demand for application software and software delivery, computers, printers, or other non PC-devices, adverse changes in general economic or political conditions in any of the major countries in which Adobe does business, difficulty in predicting revenue from new businesses, costs related to intellectual property acquisitions, disputes and litigation, inability to protect Adobe’s intellectual property from third-party infringers, use, disclosure or malicious attack, failure to realize the anticipated benefits of past or future acquisitions and difficulty in integrating such acquisitions, failure to manage Adobe’s sales and distribution channels effectively, disruption of Adobe’s business due to catastrophic events, risks associated with international operations, fluctuations in foreign currency exchange rates, changes in, or interpretations of, accounting principles, impairment of Adobe’s goodwill or intangible assets, unanticipated changes in, or interpretations of, tax rules and regulations, Adobe’s inability to attract and retain key personnel, impairment of Adobe’s investment portfolio due to further deterioration of the capital markets, market risks associated with Adobe’s equity investments, and interruptions or terminations in Adobe’s relationships with turnkey assemblers. For further discussion of these and other risks and uncertainties, individuals should refer to Adobe’s SEC filings.

The financial information set forth in this press release reflects estimates based on information available at this time. These amounts could differ from actual reported amounts stated in Adobe’s Quarterly Report on Form 10-Q for the third quarter ended Aug. 29, 2008, which the Company expects to file in October 2008. Adobe does not undertake an obligation to update forward-looking statements.

About Adobe Systems Incorporated
Adobe revolutionizes how the world engages with ideas and information — anytime, anywhere and through any medium. For more information, visit www.adobe.com .

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Adobe Systems said Monday it’s helping to sponsor the SQLite database project, software that figures prominently in at least two of the company’s high-profile new projects.

Adobe open-source honcho Dave McAllister said in a blog posting Sunday that Adobe had joined Mozilla and Symbian in joining the SQLite Consortium.

“By supporting the work of the SQLite consortium, Adobe is supporting the continued growth and improvements in SQLite,” McAllister said. “Adobe’s support of the SQLite Consortium demonstrates Adobe’s commitment to open source, and belief that technologies such as SQLite should remain independent and free in the best interests of the community.”

Adobe also fired up a new open-source Web site on Sunday.

Adobe now has launched its AIR software, which uses SQLite.

SQLite is used within the company’s newly released Adobe Integrated Runtime (AIR) software, an operating system-independent foundation layer for Internet applications. Adobe also has said it uses SQLite to power the image database of its raw-photo editing and cataloging software, Photoshop Lightroom.

SQLite Consortium members get a variety of support perks, according to the site, including “the guaranteed, undivided attention of the SQLite developers for 23 staff days per year and for as much additional time above and beyond that amount that the core developers have available.”

Adobe Lightroom uses SQLite for cataloging photos.

It should be noted that SQLite isn’t open-source software, strictly speaking. Though SQLite’s underlying source code is freely available as part of the public domain, that doesn’t meet the technical requirements of the Open Source Definition.

However, some of the principles of the movement apply. Outsiders may contribute their own software to the project, for example, though as with many open-source projects, they must explicitly relinquish copyright and turn over rights to their software to the public domain.

Mozilla and Symbian were charter members of the SQLite Consortium, which was launched in December 2007.

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I was fortunate to speak Wednesday on a panel at the Adobe Max conference. The topic? “Why Open Source, and What Makes the Cut?”

We spent a lot of time talking about open-source strategy, generally, but it was when we discussed how open source applies to Adobe that things became particularly interesting.

Adobe actually does a lot of work around open source, though it generally gets (and takes) little credit for that work. But so does every big company, with few exceptions. No, the real question is in what Adobe chooses not to open source, and why.

It turns out that just as there are a myriad of good reasons for open sourcing technology, there are equally good reasons for not open sourcing technology. Adobe has good reasons on both sides, but also clearly recognizes that open source is not a binary decision.

That is, it’s not a question of whether Flash Player should be 100 percent open source. It’s a question of which portions can and should be open sourced. Ditto for Adobe’s other technologies. Open sourcing some technology could seriously benefit Adobe and the larger open-source community. Open sourcing other technology would not.

So Adobe and other companies, from Microsoft to Openbravo, selectively decide what to open source, and how. It’s not a binary decision. Today open sourcing Creative Suite 4 as a whole is almost certainly not on the cards at Adobe, but contributing to complementary projects like WebKit is in play.

Is it enough to satisfy free software activist Richard Stallman? No. But it’s a prudent approach to managing one’s business and one’s community. Pressure from both should lead to the right, non-binary decision most of the time.

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Internet Explorer dominates the Web browser market, but are that many people so in love with it? Meanwhile, the Flash player dominates its segment because lots of people find it to be a terrific. So might Adobe one day decide that the next logical step is to try its hand at building its own Web browser?

Turns out that’s not such a crazy idea. Following the completion of Adobe’s acquisition of Macromedia in 2005, the company’s brass actually toyed with the idea.

“We looked at making our own browser,” said Adobe’s chief technology officer, Kevin Lynch, in an interview leading up to this week’s Adobe Max conference. “We thought about how to advance the capabilities of the Web.”

At first blush, that sounds like a fit with the message Adobe attaches to Flash as a technology to foster delivery of “applications, content, and video to the widest possible audience.” But the idea ultimately failed to persuade management that it was wise to commit the resources (and in the process pick another fight with Microsoft.) “Our primary interest is to build a great platform upon which others can build great applications,” Lynch said. “There are enough browsers in the world.”

Too bad. As a user, I’d like even more choice. Even though they don’t have more than minor shares of the market, I’m thrilled that Mozilla, Opera, and Google decided to design their own PC Web browsers. Anything to turn up the heat on Microsoft and force it to think more creatively about the Internet browsing metaphor.

For Adobe, the temptation was to create a product that would do a better job of enabling its technologies on client systems. But Lynch said the green light hinged on whether an Adobe browser would win wide enough distribution. As even Google is discovering, that’s not an easy goal to achieve.

“It’s brave of (Google) to come out with a browser,” he said. “I love to see innovation. But will Chrome get 80 or 90 percent reach? I don’t see how that’s possible.”

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I’m a big fan of Adobe Systems’ camera profiles, which when editing the raw images that higher-end cameras can produce imbues photos with what I find to be more natural hues. So I was glad to hear camera profiles are moving out of Adobe Labs and into Photoshop and Lightroom.

I apply the “camera faithful” profile by default when I import photos from my Canon SLR into Lightroom. But when I tried to use the profiles on some photos I took with an Olympus E-3, I found I couldn’t.

Now seemed a good time to find out exactly which models are supported, and Adobe obliged with a list.

All SLRs from Canon and Nikon, which dominate the SLR market, are supported in the profiles that ship with Adobe Camera Raw 5.2, and that’s a good start. But things get thinner after that.

The Pentax K10D, K20D, and K200D SLRs also have profiles, as does Leica’s expensive and somewhat exotic rangefinder, the M8. Only two compact cameras, Canon’s PowerShot G9 and G10, have profiles.

There are no profiles for Sony, Olympus, Samsung, or Panasonic SLRs so far. No doubt Adobe is working on it, though. I’ll update this post if I hear further details.

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Starting to answer the clamorous demand from open-source fans, Adobe Systems plans to release an alpha version of its Flash Player technology on Monday for those using 64-bit Linux software.

Linux has moved more rapidly than Windows or Mac OS X to support 64-bit processors, in part because the developer-friendly compile-your-own-software ethos that prevails makes it easier for the technically savvy to make the switch. But one of the obstacles in the switch is that people could only use the 32-bit Flash plug-in, which meant that they only could use the 32-bit version of Firefox.

The company plans to release the software at its Adobe Max conference in San Francisco.

The 64-bit support will arrive on other operating systems later, Adobe said, but Linux fans get it first because they were the most vocal in their desire for it.

“Release of this alpha version of 64-bit Flash Player on Linux is the first step in delivering on Adobe’s plans to make Flash Player native 64-bit across platforms,” Adobe said in a statement. “We chose Linux as our initial platform in response to numerous requests in our public Flash Player bug and issue management system and the fact that Linux distributions do not ship with a 32-bit browser or a comprehensive 32-bit emulation layer by default. With this prelease, Flash Player 10 is now a full native participant on 64-bit Linux distributions. We are committed to bringing native 64-bit Flash Player to Windows and Mac in future releases. We expect to provide native support for 64-bit platforms in an upcoming major release of Flash Player. Windows, Macintosh and Linux players are expected to ship simultaneously moving forward.”

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Correction, 11:25 a.m. PST: This story misspelled the last name of The New York Times vice president of research and development. He is Michael Zimbalist.

SAN FRANCISCO–During the keynote speech of the Adobe Max conference, New York Times Vice President of R&D Michael Zimbalist demonstrated a new news reader app from the company. Based on AIR 1.5, which is being released Monday, the news reader was shown displaying International Herald Tribune content, but it’s pretty clear that the company will release a reader for The New York Times as well. Zimbalist said the the IHT reader will come out “this fall,” but a NYT spokesperson later said it will arrive in the first half of 2009.

There is already a desktop reader for the Times, of course, but it’s a fairly heavy app. The new AIR version will take advantage of some of the new features built in to the new AIR runtime, including a fast text-rendering engine that re-flows text as you resize the screen.

The new app also uses the video capabilities of Flash 10, which Air 1.5 uses. The demo showed videos in ads, but it could also be used for editorial content.

Of course, there’s also a nice crossword app built into it. It’s not social, though. Maybe the next version?

After Zimbalist left the stage, Adobe CTO Kevin Lynch demonstrated the app running on a “MID”-size Linux computer, the Aigo. Adobe’s AIR 1.5 is being released for Linux and will have the same video and text-rendering capabilities of the Windows and OS X versions.

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Adobe Systems on Monday launched a technology called Pixel Bender that brings new effects to Photoshop–and some new work for computers’ often-idle graphics chips.

Pixel Bender, presently an Adobe Labs project, is a new engine for enabling many image transformations. Examples include a kaleidoscopic hall-of-mirrors effect, a twirled distortion effect, a fisheye lens effect, and a ray-tracing effect. Some effects are available at the Pixel Bender Exchange.

Photoshop already has a plug-in architecture for many special effects, but Pixel Bender is designed to be easier on programmers creating effects and faster to show them. The acceleration comes through support not just of multicore processors, but also of the graphics processors that Photoshop CS4 now can exploit.

Last night, Adobe posted the new version 1.1 of the Pixel Bender Toolkit for those who want to create their own effects. Photoshop Senior Product Manager John Nack announced availability of the Photoshop CS4 Pixel Bender plug-in on his blog Monday.

But Pixel Bender isn’t just for the version of Photoshop that runs on PCs. On Monday, Adobe Chief Technology Officer Kevin Lynch demonstrated the technology running on Photoshop.com, the company’s online photo-editing site.

“This is under development and will appear in a future update,” Adobe spokeswoman Cari Gushiken said of the Photoshop.com.

This abstract pattern shows an image hosted at Photoshop.com altered by two Pixel Bender filters, one for creating a halftone dot pattern and one for the tunnel effect. Adobe CTO Kevin Lynch demonstrated the technology at the Max conference.

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