The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.

ADBE Stock Price

Summary:

Adobe is facing increasing challenge from Serif’s Affinity Photo and Affinity Designer software.

Serif’s old plan was to keep Affinity Photo and Affinity Designer exclusive to the Mac platform.

However, Serif recently announced that it is now working on releasing the Windows versions of Affinity Photo and Designer.

It is, therefore, good that Adobe has made important upgrades to Illustrator CC. Adobe’s $19.99/month vector illustration software is vulnerable to Affinity Designer.

Adobe is still a worthy investment for long-term investors.

I Know First is currently bullish on the ADBE stock movement

Two weeks ago, I discussed how Adobe (ADBE) is addressing its weakness in the UI/UX design and prototyping software. Adobe’s upcoming Experience Design User Interface-design-specific software could slow down the rising popularity of Bohemian Coding’s $99 Sketch 3 app. Sketch 3 is a minimalistic alternative to Illustrator CC and UI/UX designers fell in love with it.

Adobe’s makes most of its revenue from the monthly subscription fees of Creative Cloud CC. The management is trying to defend its primary cash cow. Experience Design will enable Adobe to compete with Sketch 3. Unfortunately, Adobe’s $19.99/month Illustrator CC vector illustration program is not only threatened by Sketch 3.

The other competing product that could weaken subscriptions of Illustration CC is Serif’s $50 Affinity Designer. This vector illustration software from Serif is again a lightweight alternative to Illustrator CC. I bought Affinity Photo and Affinity Designer for my MacBook last year.

In my experience, I believe Affinity Designer was the stronger threat to Adobe. I found Affinity Photo still unable to replace my Photoshop CC subscription. On the other hand, Affinity Designer was much faster than Illustrator CC when it comes to multi-layered, large-sized tarpaulin poster designs.

Like Sketch 3, Affinity Designer focused on removing the bloat of Illustrator CC. These two Mac-only vector drawing software eats less RAM and exerts lower demand from the CPU. The danger now is that Affinity Designer’s threat is no longer limited to the Mac platform.

Affinity Will Expand To Windows Computers

Serif is currently working to bring its $49 Affinity products to Windows. The strong sales of touchscreen-friendly Windows 2-in-1 tablet/laptops are one good reason why Serif wants to go beyond the Mac platform. There are no touchscreen-equipped Mac computers yet.

Vector illustration programs like Illustrator CC and Affinity Designer excels more when artists could use them via capacitive displays. The one-time payment of $50 each for Affinity Photo and Affinity Designer will appeal to Windows PC-users who never liked the $9.99/month rental fee of Photoshop CC, and a $19.99/month fee of Illustrator CC.

(Source: Serif)

Windows-based graphic artists and UI/UX designers who are from third-world countries will likely switch their loyalty to Affinity Designer. Even Windows-only current subscribers of Illustrator CC might get tempted to switch to Affinity Designer once they learn it is as speedy as Sketch 3. Since Sketch 3 remains a Mac-exclusive software, Windows-only designers might appreciate that Affinity Designer is also great for mobile UI/UX-specific jobs.

Affinity Designer is as good as Sketch 3 when it comes to creating and optimizing vector User Interface graphic elements.

(Source: Serif)

I’m from the Philippines and I will certainly buy the Windows version of Affinity Designer. It will replace my 12-year old Freehand MX 11.02. Yes, I prefer Freehand MX over Illustrator CC because it gives me a faster workflow. I could not use Freehand MX on my MacBook because it was incompatible with Mac OX 10.7 and newer OS versions. I had to buy Affinity Designer last year to get a lightweight vector illustration program for my Mac OS X computers.

I expect hundreds of thousands of Freehand MX loyalists to gladly embrace a Windows version of Affinity Designer. Serif’s product is like the updated version of Freehand that Adobe never released. I do not do UI/UX designs. I mostly Freehand for $5 logo jobs, $20 ad/poster layouts. However, I am confident that Affinity Designer could match the RAM-friendly feature of Freehand MX.

(Source: Motek Moyen)

Adobe’s Pre-emptive Measures Against Serif

Adobe has realized the upcoming threat from cross-platform Affinity software products. Like I said earlier, Experience Design CC is the upcoming lightweight version of Illustrator CC. It will be intended for UI/UX designers who now use Affinity Designer and Sketch 3. Adobe will add more features to Experience CC to make it do more than just UI/UX design and prototyping.

The other protective move that Adobe did is to give Illustrator CC 2015 tools and features that came from its discontinued Freehand MX product. Illustrator’s new Curvature tool is basically the Bezigon Tool of Freehand MX. The Shaper tool is similar to Freehand MX’s Freeform tool. Adobe also made the Pencil tool in Illustrator CC 2015 as good as the one found in Freehand MX.

Without the Curvature and Shaper tools, Illustrator CC could lose even non-UI/UX designers to Affinity Designer. Digital illustrators and game-centric character/environment artists who create complex drawing will remain loyal to Illustrator CC. The Curvature and Shaper tools allow for faster line drawing and editing.

Conclusion

I am long ADBE. I’m also encouraging long-term investors to add ADBE to their bets. The management is wisely adapting to the growing competition. Serif and Bohemian Coding are not going to kill the cash flow from Adobe’ Creative Cloud monthly subscription income. Yes, Affinity’s release on Windows platform will hurt a bit. But once Experience Design CC is released, I see Adobe maintaining its growth in subscription fees.

Whatever Illustrator CC loses from Serif’s move to release its software on Windows can be covered by future monthly subscribers of Experience Design CC.

The algorithmic forecasts from I Know First are also very favorable for Adobe. The one-year +113.75 market trend forecast score for ADBE hints that the stock has a lot of upside potential. Buying Adobe now while it trades below $100 is worth serious consideration.

In addition, I Know First algorithm has previously predicted forecast for the Technological package like in this forecast from the 22nd of May to the 25th of May managing to bring an average return of 4.61% in just 3 days.