Web developers who currently use Flash tools to produce Web content will likely move over to the newer HTML5 technology, which Adobe embraced on Wednesday
NEW YORK, USA: Adobe Systems Inc halted development of its Flash Player for mobile browsers, surrendering to Apple Inc in a war over Web standards as the company surprised investors with a restructuring plan.
While the matter might seem like inside baseball for the average person, it is likely to improve the browsing experiences of tens of millions of iPhone and iPad users, who have trouble accessing sites built with Flash.
That is because Adobe's decision means Web developers who currently use Flash tools to produce Web content will likely move over to the newer HTML5 technology, which Adobe embraced on Wednesday.
Adobe's concession to Apple and its late founder Steve Jobs, who famously derided Flash as an inefficient power-hog, came as the design software specialist warned that revenue growth will slow next year.
That is because the company is scaling back development of some products and shifting toward leasing other types of software via the cloud on a subscription basis, instead of selling licenses up front.
The news, detailed Wednesday at the company's annual analyst day, sent shares in the company tumbling nearly 8 per cent.
Adobe announced a restructuring plan on Tuesday that involves laying off about 7 per cent of its workforce.
Adobe said revenue growth is expected to slow to 4 to 6 per cent in fiscal 2012 -- below the roughly 9 per cent Wall Street was projecting, on average.
The company said the revenue shortfall is partly because it plans to scale back promotion of its LifeCycle business process management software and Connect web conferencing businesses. It will stop marketing those products to most customers, though it will continue to support them.
Analysts were uncertain when Adobe's moves would deliver, despite executives saying that top line growth should return to normal in 2013.
"Shifting from a license model to a recurring model is hard," said Brigantine Advisors analyst Barbara Coffey.
"Longer-term, Adobe will be a stronger company. However, in the meantime we believe that the shares will languish until revenue growth is evident."