Adobe Systems (Nasdaq: ADBE) is starting to look ridiculous on the issue of mobile Flash software. Today is a lynchpin in the fortunes of Flash -- can Adobe get it right?

The lack of Flash support on Apple (Nasdaq: AAPL) hardware like the iPhone and iPad has prompted some very public mudslinging from both sides of the fence. So far, I have tended to side with Adobe in this debate, as it shouldn't be that hard to include a simple piece of software on a high-end piece of gadgetry. Corporate politics shouldn't weigh heavier than real-world user demands when making design decisions, after all.

Things that make you go hmmm ...
But Apple may not be at fault here. Consider how many non-Apple handsets you can find on today's open market with full Flash support: zero.

Oh, some Google (Nasdaq: GOOG) Android phones support the crippled Flash Lite instruction set, and the Froyo update to the operating system brings full Flash functionality to Android in general. Nokia (NYSE: NOK) has included this technology in its Symbian phones for years, and Microsoft (Nasdaq: MSFT) supports Flash Lite for Windows Mobile phones. So far, so good.

But Flash Lite isn't good enough to play most Facebook games, for instance -- sorry, Zynga fans. This is not the whole package. As for Froyo, it is available for Google's own Nexus One handset but is not yet the standard software even there. It takes technical know-how to get it all working.

That's where the "here and now" comes into play. Adobe just released version 10.1 of the mobile Flash platform to numerous partners. Adobe needs to get this release right -- but it may already be too little, too late.

But wait -- there's nothing more
Palm (Nasdaq: PALM) is the lab rat of choice, here. After more than a year of promises, including an evaporated "end of 2009" deadline, Palm and Adobe claim to be working on the implementation together but wouldn't commit to a new deadline. The acquisition of Palm by Hewlett-Packard (NYSE: HPQ) sealed Palm's lips, and Adobe wasn't talking either. Flash 10.1 had better blow our minds right out of the box, because it is way overdue on a dying platform.

I'm sorry, but something seems rotten in the state of Adobe. Can you really blame Apple for dragging its feet on Flash support when you can't deliver the goods for a willing partner? Meanwhile, web developers have started to design around the issue by leaving Flash out of their site designs. With emerging tools like HTML5 and a growing slate of Javascript toolkits readily available, it makes more sense to lose Flash altogether than to spend the time and money to have Flash and non-Flash versions of every page.

The mushroom cloud
I now expect the entire Flash-on-iPhone debate fading to black in short order. The rise of mobile Web browsing will continue apace and put greater demands on site designs to avoid leaving blank spaces or error messages where those Flash widgets would normally appear. If Adobe can't get its act together and push out the full Flash experience to Palm users for starters, the whole platform is destined for the scrap heap of computing history.

And it'll be Adobe's own fault for not getting the software up to snuff in a timely fashion at this critical juncture. The boat has already set sail on the M/S Mobile Internet, and Adobe is missing the departure. Management must know this very well, but seem powerless to do anything about it. The technical obstacles that Steve Jobs has been alluding to must be very real, or else Adobe's management truly clueless. The more likely explanation is that Flash just doesn't move smoothly to mobile hardware.

The aftermath
None of this will kill Adobe outright, of course. Analysts estimate that less than 10% of the company's sales come directly from Flash, even if Flash authoring is a selling point for other Adobe products like DreamWeaver as well. With or without Flash, Photoshop still owns the image editing market, for example.

The end of the "Flash everywhere" era will render the $3.4 billion buyout of Flash creator Macromedia nearly worthless and trigger some hefty goodwill writedowns. Then Adobe hits rock bottom and starts to bounce, as Mr. Market gets over his Flash grief and starts to treat Adobe as the digital media giant it still is. When that happens, Adobe will be undervalued and a great stock to buy. Stay tuned for updates on that development; if the writedowns don't come by 2012, I'll eat my hat ...