However popular Adobe Systems Inc.'s design and programming tools may be, they don't sell themselves.
They rely, at least in part, on a pair of free consumer applications from Adobe that make their designs pop and programs run. Those two apps -- Adobe Reader for opening PDF files and Flash Player for Web multimedia -- are installed on more than 500 million Internet-connected PCs worldwide, claims Adobe, giving Flash a 90%-plus penetration rate.
Having conquered PCs, Adobe is turning its attention to mobile phones. By 2010, it wants to see a total of 1 billion phones shipped with Flash Lite, a cut-down version of Flash Player that runs small apps and games, and, with an update released earlier this month at its annual MAX conference, plays Web video.
Getting Flash Lite on as many phones as possible will enable its huge community of designers and developers -- the 2 million "people in black turtlenecks" as Gary Kovacs, vice president of Adobe's mobile and device business, calls them -- to port their content and applications to a potentially lucrative platform.
"Our developers are already making money on the Web. They just want a way to get to mobile," Kovacs said in an interview late last week.
An uphill battle
Since its release four and a half years ago, Flash Lite has been shipped on 300 million mobile phones and handheld devices. This year alone, Adobe expects 250 million Flash Lite phones to ship, giving it 27% of the global phone market, according to Kovacs.
By contrast, the most popular mobile application platform -- Java Micro Edition -- will come preinstalled on about 500 million phones and devices this year, according to British research firm Informa PLC.
There are 3 billion mobile phones in use today, according to Informa, far more than the 1 billion PCs that IDC estimates are currently in operation.
Factor in the average two-year life span of a mobile phone today, and Flash Lite appears to run on just 8% to 10% of all cell phones today.
"Adobe has an uphill battle if it wants Flash Lite to become the platform for multimedia on mobile phones," said analyst Jack Gold, of J.Gold Associates LLC in Northboro, Mass.
Adobe's obstacles
On PCs, Adobe could rely on Web downloads and bundling with Windows, on which Microsoft Corp., under pressure from antitrust regulators, offered to propagate Flash. And Flash is free.
Things are different in the mobile space. Most phones today, due to security fears and hardware limitations, restrict users from downloading and installing applications such as Flash Lite. Apple Inc.'s iPhone was the best example, until its developer support announcement earlier this month.
That means to get Flash Lite onto a phone, Adobe needs to convince a phone manufacturer to pay a licensing fee for it. While Adobe has reportedly lowered that fee several times in the past several years, Kovacs said that as of today, "it's priced where it needs to be, and we have no plans to lower it."
And it's a chicken-and-egg problem. Though the pool of Adobe developers is huge, phone manufacturers will continue to hesitate to license Flash Lite as long as the number of Flash applications and their users remains small, says Gold.
"Flash may be shipped on a lot of phones, but that doesn't mean anything unless it's being used," he said.
Finally, many phones -- Adobe says it doesn't know the exact number -- use Flash Lite simply to deliver a fancier, more interactive user interface. Such phones, such as LG's $500 KE 850 (also known as the Prada Phone), can neither download nor run Flash applications, acknowledges Kovacs, making them "not totally relevant" to Flash developers looking for an audience for their wares.
Big in Japan
Adobe's mobile business, which includes Flash Lite licenses as well as sales of software such as Flash Cast, remains small, comprising just 2% of the company's revenues in its most recent quarter (though that does not include sales of other tools such as Flex or CS that can be used for Flash Lite development).
Flash Lite is an undeniable success in Japan.
"Literally every phone from our largest operator, DoCoMo, can support downloadable Flash content," Kovacs said.
That has created a $1.8 billion revenue stream from which DoCoMo skims just 15%, according to Anup Murarka, Adobe's director for technical marketing.
"The developer and aggregator get paid the lion's share," he said.
Adobe is hoping it can replicate that model in the U.S. Through Nokia Corp., it hopes to have 40 million Flash Lite-enabled phones in American consumers' hands next year. And through Verizon Wireless, which has already agreed to license Flash Cast, it hopes to build a similar ecosystem.
Adobe is taking steps to ease the notoriously laborious process of writing for mobile devices. Its latest CS3 software lets developers simulate how their Flash applications will run on any of more than 300 handsets, reducing rewriting and testing time.
The problem is the huge number of handset models on the market, and that problem will only multiply. But Adobe vows to keep pace. "It'll be more than in dribs and drabs," Kovacs said.
That should improve what Andreas Constantinou, a London-based analyst at VisionMobile, already calls "without a doubt the best-in-class tools for mobile content development."
Looking to make friends
Adobe is also trying to partner with other mobile platforms, rather than compete with them. It's touting Flash Lite as an ideal multimedia delivery platform running on top of the latest versions of the Symbian operating system, which dominates the mobile market. And it's adding high-definition video to Flash Lite next year, a needed feature as more phones and devices add full VGA (640 by 480) screens, Murarka said.
Adobe is also "actively working," according to Kovacs, on an ad delivery model for the small screen that would include some form of the digital rights management technology in its Adobe Media Player for the PC.
Adobe CEO Bruce Chizen said last week that the company expects to move from a desktop to a hosted software model within a decade.
On mobile phones, that could mean that Adobe will begin to offer hosted or semihosted applications through software similar to its Flash Media Server, Kovacs said. Or it could mean Adobe will offer a cut-down version of Photoshop on mobile phones -- possibly via Flash Lite -- that would let users do basic things such as crop or eliminate red-eye on pictures they've taken on their phone.
"Mobile is going to be the new edge," Kovacs said.
As for Apple's plan to fully open up the iPhone to third-party developers by next Feburary, does that foreshadow Apple announcing plans to bundle Flash Lite?
"We have nothing to announce in that regard at this time," Kovacs said.
Still, Kovacs is confident of meeting or beating Adobe's 1 billion phone target by 2010, by which its penetration rate would have grown to almost 25% (based on Informa's prediction of 4.36 billion phones in use at that time).
"It was really a lot of heavy lifting to get where we are now, two to three years of work that had to happen," he said. "But now, we're starting to see the curve arc upward."