Adobe ends mobile Flash Player, reveals enterprise pullback

The company is now focusing on HTML5 and AIR for mobile users

UPDATED 8:25a PT -- Adobe Systems is ending development of its Flash plug-ins for mobile browsers, the company confirmed today. Instead, Adobe will focus on HTML5 and, to a lesser extent, its AIR runtime environment. Adobe says it will work on tools that convert Flash content and apps to HTML5 and AIR versions for use on mobile, rather than continue to develop its mobile Flash Player.

Adobe has been working on mobile Flash for years, but shipped an Android version only a year ago and on both HP WebOS and the RIM BlackBerry PlayBook tablet this summer. Apple has adamantly refused to allow Flash on iOS over performance concerns (though it does allow AIR), and Flash has also not appeared in the BlackBerry smartphone OS or in Microsoft's Windows Phone 7 despite Adobe's promises to do so.

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Adobe also announced on Tuesday that it will cut 750 jobs and reduce its investment in enterprise software as part of a broader plan to target the fast-growing markets for digital media and digital marketing products, the company said Tuesday. Adobe will provide details of the plan at a meeting for financial analysts in New York this morning, it said. Adobe also lowered its earnings outlook for the current quarter, in part to pay for the layoffs.

The enterprise changes are part of a restructuring plan intended to increase Adobe's focus on what it called the "exploding growth categories" of digital media and digital marketing. Adobe targets those markets with tools for content creation and distribution, and for measuring results from digital marketing campaigns.

"To drive increased Digital Marketing bookings, which are recognized as recurring revenue, the company will reduce its investment, and expected license revenue, in certain enterprise solution product lines," Adobe said in a statement. But it declined to comment ahead of the analyst meeting today on which enterprise products would be affected, or how they would be affected.

Its enterprise products include Adobe Connect and Adobe LiveCycle, as well as Web content management software it acquired last year when it bought Day Software. The category doesn't include its Acrobat products, which are part of Adobe's Knowledge Worker division. The enterprise products generated less than 10 percent of Adobe's revenue last quarter, far less than its content creation and digital media divisions.

Today's analyst meeting is likely to focus more on Adobe's plans for accelerating growth. It will continue to invest in its Creative Suite products and shift resources to support greater investment in HTML5, through tools like Dreamweaver and Adobe Edge, it said. In digital marketing, it wants to grow its analytics and reporting business, especially on mobile devices and social networks.

The job cuts will be made primarily in Europe and North America, Adobe said. It had 9,100 workers at the end of last year, making the cuts about 8 percent of its total staff. It expects to record a restructuring charge of $87 million to $94 million in the current quarter, mostly for severance payments. That will reduce its earnings per share to between $0.30 and $0.38 based on generally accepted accounting principles, it said. Adobe is still on track to meet its fourth-quarter revenue goal, it said, but the changes will reduce its revenue growth in the next fiscal year by 4 to 5 percent, to achieve revenue growth of about 6 percent.

InfoWorld executive editor Galen Gruman contributed to this report.

James Niccolai covers data centers and general technology news for IDG News Service. Follow James on Twitter at @jniccolai. James's e-mail address is james_niccolai@idg.com

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