Adobe Fights On with Flash 11 Despite Being Rebuffed by Apple and Microsoft

September 30th, 2011 by Trefis Team
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Adobe (NASDAQ:ADBE) recently announced that it will be launching the next version of Flash — Adobe Flash 11 — in the next two weeks. [1] Despite being sidelined by Apple (NASDAQ:AAPL) which refused to support Flash on the iPhone and the iPad, and Microsoft (NASDAQ:MSFT) which confirmed that its new Metro UI in Windows 8 won’t support Flash, Adobe is still pushing forward with Flash updates and is trying to convince developers and users that it’s still relevant in this age of smartphones, tablets and HTML 5.

We currently have a $34 Trefis price estimate for Adobe, which is nearly 35% above its current market price. Creative Software, of which Flash is a major component, accounts for more than half of Adobe’s Trefis price estimates and a majority of its revenues.

Adobe Not Giving Up on Flash, But Also Investing in HTML 5

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Flash, which is ubiquitous on computers worldwide, has been relegated to the sidelines when it comes to smartphones and tablets. Apple first abandoned Flash on its iPhone and iPad, citing performance and battery issues. Flash is supported on Google‘s (NASDAQ:GOOG) Android and Nokia‘s (NSYE:NOK) Symbian, but isn’t very efficient in terms of performance and continues to drain the battery rather fast. Despite the rise of tablets, desktop and laptop computers continue to be used by a majority of users. Adobe’s new Flash Player 11 will offer a series of improvements for its users, including better security, and much better 2D and 3D graphics performance using hardware acceleration.

Adobe makes money from Flash primarily by selling development tools and software like Flash Professional which allow developers to create Flash content. While it continues to invest in the Flash platform, it is also working on tools for HTML 5 development, like Adobe Edge. HTML 5 is widely hailed as the alternative to Flash, and allows you to create interactive, animated content which can be run directly in the browser without any plugins. We expect the decline in Flash development software sales to be compensated by the increase in sales of Adobe’s HTML 5 tools, with only a marginal

Check out our complete analysis for Adobe.

Notes:
  1. Adobe fights back with Flash 11, CNET [↩]