E Apple: Buy Adobe, Not Tesla

The patent infringement suit involved Adobe's user interface-related "tabbed palette" technology. Apple also sued rival Samsung (OTC:SSNLF) on user interface matters. Cook made it very clear in 2009 that he shares the late Steve Jobs' intense desire to protect Apple's patents.

Unlike Elon Musk, Jobs was not very generous when it came to patents. Rumor has it that Jobs threatened to use patent litigation to enforce a no-hire agreement he struck with other tech giants. Tesla's open source approach to patent is therefore very much in contrast to Apple's continuing fortress-like defense of valuable patents.

Software As A Service Is Safer Than Selling Electric Vehicles

The majority of creative professionals in the world today are still heavily dependent on Adobe software because nobody is allowed to copy the user interface of Adobe Photoshop, Illustrator, Premiere, After Effects, and Adobe Acrobat. Even a switch to Software-as-a- Service (SaaS) business model did not lessen Adobe's almost-monopoly leadership in graphic & design software.

The initial angry reaction to Adobe's switch to a monthly subscription for its creative suite died down. In spite of the many free or cheaper alternatives to Adobe's design software, the ever-increasing number of subscribers to Adobe's monthly offer indicates professional designers still love Adobe.

In spite of Adobe's high P/E ratio, the management of that company are superoptimistic by announcing a $2 billion buyback program. Adobe's management estimates that 2015 will deliver 6.1 million Creative Cloud subscribers, and 8.2 million by end of 2017.

I doubt if Musk is as confident as Adobe's leaders when it comes to the future of Tesla cars. Selling software as a service is a business that is not subject to import taxes, government regulation, and production delay. Potential lawsuits against Apple electric cars is not farfetched; even the geniuses at Tesla cannot prevent their cars from joining the list of many cars going up in flames.

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Disclosure: The author is long AAPL

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Brian Roxborough 4 years ago Member's comment

Apple will certainly not find it easy to prosper with Tesla and the Lithium battery against Hydrogen power and Toyota and other established global automotive giants. In fact, Apples'' rivals must be rubbing their hands in delight, at the prospect of the Giant being 'brought down'' by any rash decision to buy Tesla.

Levent Taskan 4 years ago Member's comment

As unlikely and nonsensical as it is, Apple buys Adobe I'm switching to Corel.

Nico Isaias Rivera 3 years ago Member's comment

Go! No one is preventing you to go. We're happy to see you switch to Corel.

Alexis Renault 4 years ago Member's comment

And support Windows? No way :)

Michele Grant 4 years ago Member's comment

I never see this happening. Adobe sells to the pro market and that's not where Apple positions itself.

Duke Peters 4 years ago Member's comment

Just an observation, but why doesn't $AAPL buy $DIS, $BBRY, $CALL and/or private company's Soundhound and Soundcloud? This way they have content, enterprise, and social/mobile with money to spare!

Moon Kil Woong 4 years ago Contributor's comment

Please Apple will not buy Adobe. First Apple waged war against Adobe, thus there is bad blood. If they did they would be investigated by the government for monopolistic practices. Then Adobe would find half it's customers switch to another solution rather than giving money to their enemy. Last Adobe is already a very overpriced stock right now.

Tesla is equally bad. Although Tesla is a early adopter of electric cars it is by far not proven to be a long term winner. Likewise, it rebuffed Apple's dances to become a rolling iTunes box as did most other car companies for good reason. And Tesla is also ridiculously expensive given they only make a profit off of government subsidies. If anything taxpayers, especially California taxpayers should buy it out to save money by cutting the numbers of cars made, not the reverse.

Rebecca Duncan 4 years ago Member's comment

Just to play devil's advocate... bad blood doesn't preclude an acquisition. By definition, isn't that what a hostile takeover is?

Moon Kil Woong 4 years ago Contributor's comment

True, however, Apple for good reason doesn't acquire companies that don't like to be taken over. I have yet to recall any instance of it. For one thing it would be terribly expensive given their market cap. For another, technology wise they would tend to lose all the people they probably want. Also, usually they create bad blood for a good reason and acquiring them would be an admission of defeat. And last, in Adobe's case they would not just lose their existing business but get swatted with anti-trust investigations which would preclude from buying them even if they wanted to.