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It’s all over for Adobe mobile Flash – Apple, Google and Microsoft prevail. Actually HTML5 prevails but it amounts to much the same thing as Adobe has decided to halt investment in the multi media plug-in for mobile devices in the face of widespread adoption of the HTML5 alternative.
With the big three rejecting Flash on their mobile offerings the writing was on the wall. It’s not that mobile Flash is ‘bad’ (although Steve Jobs thought so) but that the technology world has moved on. Mobile Flash overcame browser incompatibilities in the early days but this is no longer an issue, and the widely adopted HTML5 standard allows mobile devices to run content like video. Desktop Flash development will continue but for how long, given that Adobe is shifting its attentions to software for web publishing and digital advertising. Flash for the desktop still features in its plans for the future but is swamped by other initiatives (see here). The company is also cutting 750 jobs cuts in North America and Europe as part of its realignment.
The vendor is intensifying its efforts in digital media and digital marketing, as this is where is sees future growth (and has seen payback so far this year, see here), with digital media also set increase recurring revenue via its new subscription model. The down side is that server licence revenue will dip, the end effect being an anticipated four to five percentage point drop in revenue growth in FY2012, taking expected growth down to four to six percent.
Adobe’s challenge is handling a technology and a business model transition at the same time, never an easy task. Looking at the wider implications of the mobile Flash demise, it illustrates the power of disruptive suppliers and technology and the deep impact they can have on established players.
