Adobe's Photoshop CS3 Beta Could Be Good for Apple (Which Delays its 10-K Filing)

Includes: AAPL, ADBE
by: Eric Savitz

Adobe’s (NASDAQ:ADBE) announcement yesterday that it has released a public beta version of Photoshop CS3 could give a lift to Apple’s (NASDAQ:AAPL) high-end Mac sales, UBS analyst Benjamin Reitzes asserted in a research note today.

“To date, we believe that many creative professionals have held off on buying new Intel-based Macs given key Adobe software was unavailable on the new [Intel] platform,” he writes. “However, with a beta version now available, demand could be stimulate about 4 months earlier than expected (helps Mac Pros, MacBook Pros with some impact on high-end iMacs).”

Reitzes says his fiscal 2007 estimates for Mac sales could now prove conservative. For the fiscal first quarter, he sees unit growth up 44% year-over-year, and 12% sequentially, to 1.8 million. For all of ‘07, he sees 35% unit growth with more help from the full rollout of Adobe Creative Suite 3.0 after the March 2007 quarter.

Reitzes continues to rate the share a Buy, with a price target of $108.

Meanwhile, Apple last night filed a notice with the SEC to indicate that it would not file its 10-K on a timely basis due to its ongoing stock-options backdating investigation. The filing was due yesterday; but it does expect to file within 15 days. The news seems to have put a damper on the stock today, although I doubt the option probe will cause any real issues for Apple shares unless it somehow results in questions about CEO Steve Jobs’ ability to maintain his position at the company.

Apple shares today are down 66 cents at $87.89 while Adobe shares are up more than 5% to $42.96 - a gain of $2.15.