When Macromedia first tried to charge mobile phone companies for the privilege of carrying its Flash player for viewing video, even its own executives were surprised by their success. After all, the PC version of the player had always been free. That helped to attract a large number of eyeballs to the player, which in turn meant the company could sell software to creative types who wanted to produce content in Flash (that is the same business model behind Acrobat, the free PDF document reader supplied by Adobe, which went on to buy Macromedia.) Surprise, surprise: it turned out that mobile companies were actually prepared to pay for the player as well.
So when Steve Jobs bad-mouthed mobile Flash earlier this month it sounded very much like a heavy-handed attempt at public negotiation. The current version of the software is not up to scratch yet and won’t be appearing on the iPhone, according to the Apple boss (as my colleague Chris Nuttall wrote here last week, the lack of Flash is one reason third-party developers are sounding luke-warn about their new ability to write applications for the iPhone.) When I spoke to Gary Kovacs, Adobe’s vice president of mobile products, at the end of last week he was tight-lipped about relations with Apple but still managed to hint heavily that this was really about price rather than technical competence: negotiations with Apple are ongoing.
Strengthening Adobe’s negotiating hand will be the news today that even arch-enemy Microsoft is now prepared to pay for mobile Flash. Despite its own rival Silverlight software, Microsoft has signed a licence so that it can package the player with its own mobile software for hardware makers that don’t want to do the integration work themselves. Kovacs wouldn’t give a figure, but he confirmed that Microsoft will pay a per-player charge. With more than 500m Flash players already shipped inside mobile handsets and consumer electonics devices like the Wii and the PS3, this should further strengthen Adobe’s hand.
That makes the Apple/Adobe stand-off an early test of the iPhone’s market power. If Jobs can break the mold and get Flash for free, it will be a clear sign of how he intends to wield his new clout in the mobile world. That’s something that’s already making many in the technology and media industries sweat.
