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Listening to Adobe's fourth-quarter earnings call last night, you might conclude that the answer to that question is, "Not much." In his prepared remarks, CEO Shantanu Narayen posited that developers are working around the lack of Adobe's Flash software on Apple's iPhones and iPads, and they're using Adobe tools to do it. "We have not seen any impact on our revenue from Apple's choice," he said.
I think Narayen does his shareholders a disservice with comments like that. Adobe's fourth-quarter revenue was the first billion-dollar sales performance in company history, but that was despite weakening sequential results from the creative solutions division, where many tools for Flash authoring belong. Given the tremendous sales of and interest in iPhone 4 and iPad devices, with the concordant increase in applications development for those platforms, wouldn't you assume that Adobe's results would have been stronger with a direct tie-in to Apple's app store?
The market appears to think so. In September, when Apple announced relaxed rules for how you could develop apps for its coveted store, Adobe's stock price took a flying leap. The price boost didn't last beyond a disappointing third-quarter report with a weak forward outlook, but that jump gives a clear indication of how deeply investors care about Adobe riding Apple's coattails.
Adobe's guidance was stronger this time as management sees a stronger global economy emerging amid ubiquitous Flash installations on Google (Nasdaq: GOOG ) Android and Research In Motion (Nasdaq: RIMM ) BlackBerry devices. That's great, but I still think Adobe would gain a lot from having full Flash support on Apple's various mobile platforms. And Apple would instantly make a lot of Flash developers very happy. Downplaying that aspect of the business doesn't do any favors for Adobe or its owners.
Do you see Apple ever installing Flash on iPhones and iPads? Discuss in the comments below.