Autodesk Unveils AutoCAD Mac - Analyst Blog

Autodesk Inc. (ADSK) announced to launch a Mac version of its flagship product AutoCAD in October 2010. This announcement is particularly significant as it follows a nearly two decades of detachment of Autodesk from Apple Inc.’s (AAPL) Macintosh. AutoCAD for the Macintosh will be available exclusively in North America and Europe.

 

Autodesk developed its last version AutoCAD for the Mac in 1992, and stopped supporting it in 1994. However, Autodesk continued to make other products for the Macintosh, including software used in the entertainment industry.

 

Apple has been the most sought-after technology company in recent times. With a plethora of new products including the iPad and iPhone, Apple has created a niche for itself in the mobile and smartphone market. However, the most interesting revival has happened in Macintosh.

 

Macintosh, which had lost out comprehensively to the popularity of Windows in the 90s, has regained a significant momentum in recent times. According to research firm Gartner, Macintosh accounted for nearly 10% of all personal computers sold across the globe in the first quarter of 2010. In the second quarter ending June, Apple sold nearly 3.5 million Mac computers, a 33% year-over-year increase, exceeding the growth rate of overall personal computer market.

 

This tremendous growth has prompted Autodesk to reintroduce the Macintosh version, in our view. AutoCAD, one of the most used software for professional design and engineering − Autodesk estimates 10 million people globally − will run on Mac OS X and will cost $3,995, same as Microsoft Corp.’s (MSFT) Windows version.

 

We believe this is a huge opportunity for Autodesk to gain significant market share in the Macintosh segment, owing to a strong demand.

 

Autodesk is trying to increase the adoption of next generation 3D software products as compared to the 2D market. We anticipate that increasing 3D adoption and a strong customer base will drive significant top-line growth over the long term.

 

Autodesk will also launch a free mobile version of AutoCAD with limited capacity that will run on the iPad, iPhone and iPod Touch. The mobile version will be able to read any AutoCAD files, whether they are created on Windows or Macintosh. AutoCAD mobile application will be available worldwide.

 

With the increasing popularity of smartphones, personal digital assistants (PDA) and tablets, this is a significant move for Autodesk. According to research firm Parks Associates, the number of smartphone users will be more than 1 billion worldwide by 2014.

 

We foresee considerable growth at Autodesk’s smartphone and mobile segment, as it plans to launch more mobile versions of the AutoCAD software in the market.

 

Autodesk’s large customer base provides a distinct competitive edge. However, Autodesk is expected to face strong competition from Dassault Systems SA (DASTY) and Unigraphics Solutions, who have forayed into the mainstream market with products selling in the $4,000−$5,000 per seat range.

 

We maintain a Neutral rating on a long-term basis (6−12 months), based on our confidence about Autodesk’s growth opportunities for investors.

 

Currently, Autodesk has a Zacks #3 Rank, which implies a Hold rating on a short-term basis.