Adobe (NASDAQ:ADBE) launched the latest version of its Photoshop image editing software – Photoshop Elements 10 – last week.^[1] With Photoshop, Adobe has the greatest market share in the image editing market where it competes with Quark and Corel. Photoshop Elements is a version of Photoshop which is targeted at normal consumers, instead of professionals or businesses. It offers most of the features of the professional version but with simpler options. It is also priced much lower than the professional version at about $100 for Photoshop Elements 10.

Photoshop and other Creative Software account for more than 50% of Adobe’s total $35 Trefis price estimate, which is nearly 40% above its current market price. It competes primarily with Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) in creative software.

Photoshop & Creative Software to Drive Adobe’s Stock

Photoshop Elements 10 comes with multiple new features, including the ability to organize all your photos and videos, and quickly edit and enhance them. It also comes with 2 GB free cloud storage by Adobe, so that you can share and access your photos anywhere. The low pricing compared to Photoshop Professional should attract cost conscious customers to Photoshop Elements.

Since more than half of Adobe’s Trefis price estimate hinges on the sales of Adobe’s Creative software suite, any increase in them could positively impact Adobe’s stock. Photoshop is one of the most popular products by Adobe, and a significant portion of Adobe’s revenues from Creative software are derived from sales of Photoshop.

Despite the blow to Flash on tablets, Adobe has been launching new products to keep sales of its Creative Suite going. It recently introduced Adobe Muse, a website creation tool and Adobe Edge, an HTML5 design tool, which should compensate for the lost Flash sales. We expect Adobe to continue to dominate the Creative software market throughout the Trefis forecast period.

Check out our complete analysis for Adobe.

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