Prince McLeanInvestment research firm PiperJaffray on Thursday cautioned shareholders of video production firm Avid Technology, Inc. that shares could experience some short-term volatility should Apple Inc. pull something from its sleeve at next month's NAB conference.
"At last year's NAB, expectations were that Apple would announce a high end version of Final Cut, but this did not materialize," he said." We believe that there is a greater than 50 percent chance that if Apple holds a special event at NAB, it will be the venue for this announcement."
Munster in a note to investors acknowledged that there is likely to be concern over what Apple may be holding, but said he does not believe a higher end version of Apple's Final Cut would end up significantly impacting Avid's pro post production business.
"Don't expect Avid Pro users to flock to Apple if a high-end version of Final Cut is announced," the analyst wrote. Although higher-end version of the Apple video editing software would likely offer a 15 to 20 percent price advantage over similar Avid software, surveys have shown that Avid Pro customers are less sensitive to price and more sensitive to brand and familiarity.
A recent study conducted by PiperJaffray of 161 post production professionals found that of those using an Avid system, only 6 percent were willing to consider switching to Apple in the next 12 months. Many others said they were not interested in switching to Apple, as Avid systems are what they've known for years. Several Avid Pro users also noted that "Avid is what professionals use, while Apple is what consumers and 'prosumers' use."
In his note to investors, Munster concluded that the Avid story is far from "squeaky clean," but said he believes it is getting closer to becoming a stable growing business again.
"While a high end version of Apple's Final Cut could be on par with Avid in many respects as far as functionality, Apple would be fighting a perception issue that pro editors have, as well as a loyalty to what they and the industry have been using for over a decade," he wrote.
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53 Comments
" We believe that there is a greater than 50 percent chance that if Apple holds a special event at NAB, it will be the venue for this announcement."
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I believe that there is a greater than 50% chance he may be right if what he says is true.
Now where do I sign up to get the big bucks for my analyzing skills?
I believe that there is a greater than 50% chance he may be right if what he says is true.
Now where do I sign up to get the big bucks for my analyzing skills?
That joke never gets old.
What he says is true though. However newcomers to the business are usually more likely to consider other solutions than the accepted one than those already using it. Otherwise, the first solutions to any problem would be the only solutions, and none of the newer ones would ever have survived.
If Apple does come out with competition, they have a chance, though it might take years.
Brand loyalty? Well they are not called "Avid" users for nothing.
In other news, here is the latest screen shot from the new leopard!
http://news.yahoo.com/s/ap/20070315/...louded_leopard
I agree with melgross.
But ultimately Avid will have to lower prices and will lose alot of business. I doubt Avid Express and the mojo would even exist if FCP wasn't around. They'd still be making people buy their $25,000 starter system.
As an editor that has used Avid and FCP for years, there is a perception that Avid is the king, but that will change. I personally like FCP way more after using them both. Avid requires remembering hundreds of key strokes and keyboard commands and is thus less-user friendy, (which FCP can mimick perfectly), is more expensive, and is overall just too finicky. Avid & Digidesign have owned the entertainment world for the last 20-30 years and I've always used their products, but better and cheaper things have and will come out and they'll loose some business. It will take time, but many people will eventually switch, and new ones that aren't 'stuck' in the Avid world will avoid them.