(I wrote this originally on April 9, 2010 and didn’t have the balls to post it. My prediction still hasn’t come true, but it still could.)
So it’s been a day since my personal Twitterverse, which is comprised heavily of Unity and Flash game devs, exploded into a fearful frenzy over the latest changes to the iPhone developer agreement. It essentially states that apps created for the iDevices must be made entirely with Apple approved methods. There is little doubt that this has to do with the impending release of Flash CS5 and its ability to spit out iPhone apps without involving XCode.
So, my first reaction was “how does this benefit Apple?”. It took a night and a long drive to the DMV today to really come up with a compelling long term strategic theory, but I can see an endgame: Apple is going to buy Adobe.
Why? What? But Apple hates Adobe you say? They hate Flash you say? The only thing that Apple hates is not being in control of their platform, and you can’t blame them for that. But what is upsetting developers so much about this announcement is that Apple is implicitly saying “You cannot use these new, easier methods of developing applications. Instead, you must use our difficult ones.” The irony is that Apple is normally all about being the easier and more intuitive way to use technology… but when it comes to application development, this is just not the case. Their tools suck and are not made for the masses. They are made for those who are solely dedicated to Apple technology.
At the same time, web video is absolutely owned by Flash. HTML5 is neat, and Silverlight is interesting, but to be relevant today, your platform needs to run Flash video. Apple is not stupid. The cards they are playing suggest one of two outcomes – the death of Flash outright, or the purchase of Adobe and Flash through marginalizing Adobe stock, making it a cheap buy. Apple’s market cap is a staggering $218bn USD. Adobe’s is $18bn USD. No matter how damaged Adobe becomes over this, they’ll still hold valuable IP that Apple could use. Think Postscript, PDF, Photoshop… I don’t know how far it goes but there’s much there for Apple to leverage going forward.
As we march forward into the future of Apple’s platform dominance, Adobe knows it is screwed. It’s fighting hard, but without a quantum shift in strategy, it will die. Flash has peaked in its current state and it’s being attacked from multiple vectors – From the tech end by HTML5, from the business end by Apple, and by the developer end by migration to more flexible, powerful, and lucrative paths such as Unity and the iPhone. It would be smart of Adobe to sell. And it would be smart of Apple to not only own Flash, but to own the industry standard content creation tools that Adobe has created.