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Adobe Systems Q4 Earnings Call Transcript
Author: 123jump.com Staff
123jump.com
Last Update: 9:02 AM ET December 27 2008


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Okay, so for the whole year, not just for that quarter to spike back up?

Mark Garrett

No, it should not spike back up. It will start to tail off through the year from the $10 million to $12 million that we guided you to in Q1.

Heather Bellini – UBS

Okay, and then the demand, the advertising question and then I just had one quick follow-up.

Shantanu Narayen

Sure, and maybe I’ll just also add, Heather that it’s really continued validation of the need for Flash on all of these devices and we’ve also clarified our strategic direction associated with making sure that we get great web browsing experience on smartphones, as well as building an application environment to have AIR applications that work across multiple streams. So the demand that we are seeing from all of our handset manufacturer partners as well as operators is something that is actually very pleasing to us. As it relates to the marketing budget, the real focus there has to be we’ve built over the last couple of years a really great customer database and so it’s going to be far more targeted programs. I won’t look at it from a margin perspective and say we are going to be reducing any of that to invest in these marketing programs. Rather, it’s going to be a real focused effort to make sure that we are targeting the right customers to get them moved over to the right versions of the creative suite and/or the Acrobat applications. I would also say that the marketing strategy as it relates to the shrink customers versus the licensing customers, it’s a lot more refinement of what’s critical for both of those segments. And frankly, we’ve been reducing in other areas, for example, Events which we feel has less limited usage right now and more investment in Search. So I would say it’s really more optimization of all of our marketing budgets but also a reflection of the fact that that’s going to be a real focus for us to continue to drive revenue in 2009.

Heather Bellini – UBS

And then can I ask one follow-up in regard to the price increases scheduled for the February 28th timeframe? I’m wondering if there’s any chance, given the macro environment we are in and given you set pricing in probably a different environment, if we could potentially see a rollback and not see those price increases go through, given what we’ve seen from other vendors, in particular Intuit last week?

Shantanu Narayen

Well, Heather, the feedback that we are getting from our customers continues to be that the value associated with what we deliver in Creative Suite, whether it’s the individual point products or the suites, is very good. So at this point, the focus really is more on demand generation and driving people to the product, explaining why the ROI more than pays for itself, rather than looking at price cutting.

Heather Bellini – UBS

Okay, so the price increase you would think would still go through on the February 28th timeframe?

Shantanu Narayen

That’s correct. And again, remember that it’s staggered. So in other words, the customers had 90 to 120 days, depending on which region the product was delivered in. So it happens only for the upgrade pricing in English at the end of February and then since the J version is actually shipping in Q1, that price promotional period for upgrades will stay beyond February 28th.

Heather Bellini – UBS

Okay. Thank you.

Operator

We’ll go next to Adam Holt with Morgan Stanley.

Adam Holt - Morgan Stanley


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