The Official blog of Dark Matter, Inc.

from Amy Gahran, Special to CNN March 14, 2011 5:59 p.m. EDT | Filed under: Mobile

(CNN) — For decades — dating back to the 1980s — Apple and Adobe Systems have had a deeply troubled relationship. The most recent phase of their ongoing struggle has been over whether Flash (Adobe’s hugely popular proprietary format for adding animation, video, and interactivity to web pages) would run on Apple mobile devices.

Apple has always resisted putting Flash on the iPhone, because Flash has performed notoriously poorly on Macintosh computers.

But these days internet access is swiftly going mobile, and Apple’s iPhone holds the most interactivity- and video-hungry portion of the smartphone market.

Apple does offer a mobile app that re-encodes YouTube Flash videos to play on the iPhone, but in general Flash elements won’t play on Apple mobile devices. So Adobe has been trying hard to get Apple to support Flash on the iPhone, iPad and iPod Touch.

It looks like Adobe has finally lost this battle.

Last week Adobe Systems released Wallaby — an experimental new drag-and-drop tool for developers that converts Flash files into HTML5.

HTML5 is an emerging web standard that can work with the fully featured browsers available on most mobile devices, including the iPhone and iPad. It allows developers to build mobile web pages that are much more interactive and multimedia-rich. (Technically, it’s now called just HTML, but most people are still saying “HTML5″ to refer to the new capabilities.)

Also, HTML5 can be used to build mobile apps that work offline. As CNN Money recently explained, HTML5 web apps “can still function in areas with no connection. Gamers, for instance, can continue playing uninterrupted even if their device loses its signal.”

In January, The New York Times reported that many online content services, including Vimeo and Flickr, are experimenting with using HTML5 to deliver video and other rich media, probably driven in part by Apple’s lack of mobile support for Flash.

The Washington Post reports that Wallaby (a program that runs on the Adobe AIR platform, which does work with Apple’s iOS mobile operating system) “was tested with iOS 4.2. The only supported Webkit browsers at this time are Chrome and Safari on OSX, Windows and iOS.”

What does this mean for iPhone users?

If Wallaby becomes popular with developers, then many websites that use Flash to present interactive features or multimedia content — anything from videos to games to simulations and more — may suddenly start working right on the iPhone and iPad. So iPhone and iPad users will encounter fewer of those annoying blank holes on web pages where multimedia is supposed to appear.

But in the big picture, if most internet access goes mobile (as Gartner predicted will happen by 2013), then there might be less and less reason for web developers to use Flash. It could be that HTML5 might become the norm, and Flash might fade into the mists of tech history.

Daniel Eran Dilger predicted Adobe’s move to accommodate HTML5 almost a year ago, in his brilliant mock-biblical chronicle of the history of Adobe vs. Apple, an amazingly entertaining read.

Dilger wrote: “…And Adobe saw four horsemen of the apocalypse ascending from the sea, the rider of the white horse was Steve Jobs and he was bent on conquest. And a second horse, red, was given to iPhone to take away market share from smartphones, and to cause phone makers to wage war and to fall upon their own swords.

“And a third horse, black, was carrying the scales of the iPod touch, and it measured out music playback from iTunes and sold many apps and starved other mobile platforms of mobile application demand. And fourth horse, pale, had a rider named iPad, which pundits called Death. And it caused famine for tablets and plague for slates and killed with a sword. And none of the horsemen used Flash.

“And Adobe frightfully woke from its vision of terrors, and realized that its days of monopolizing the web with Flash content were over.

“…And then Adobe began building HTML5 development tools, and it charged reasonable prices and built cross-platform products and the people rejoiced and Adobe’s death was spared and it lived comfortably for many days next to Apple.

“And Steve Jobs said thank you and Adobe said no, thank you. And they all lived happily ever after.”

The Mobile Marketing Association today published its top ten mobile marketing trends to watch in 2011, and even though they’re aimed at the Asia Pacific region, they outline similar trends on a global scale.

The MMA predicts the global mobile advertising market is expected to grow to $13 to $14 billion in 2011, with Asia Pacific expected to bring in the majority of this revenue followed by North America and Europe.

“Recent industry reports from InMobi and Synovate have revealed that consumers are showing a greater inclination towards receiving mobile advertising and marketing messages,”said Rohit Dadwal, Managing Director, MMA Asia Pacific Pte Ltd.  ”As the market continues to grow, we hope to continue to provide insights that we believe should to be on the radar screen of every organisation when deciding on their mobile spend for the region.”

Here’s the MMA’s top 10 trends to watch in 2011:

1.  Personalization and privacy will increase effectiveness and credibility of the mobile media as a marketing channel: As mobile technology continues to evolve, mobile marketing messages will become increasingly personalised / relevant. Additionally, the adoption of transparent, permission-based marketing along with the introduction of regulations and applications for blocking unwanted content will help overcome the perception that mobile advertising is nothing but spam. Mobile will be the only truly conversational and measurable medium that can lead to an actual, real-time increase in business-to-consumer transactions.

2.  Over the top services will drive data usage – On-deck operator ad revenues will be overshadowed by over the top application-based value-added services revenues. These services will help create mobile inventory and enable greater mobile ad spend. Operators should take a step back from establishing their own app stores and concentrate on enabling more converged devices like tablets. Telecom service providers will be forced to review their publishing business investments and plans.

3.  Free SMS/free video/free phone calls will be available across devices – Applications like WhatsApp and Viber are already allowing free SMS and calls from mobile devices. More such applications will be entering the market making these basic mobile features available free of cost across devices. We will also keep seeing an increase in mobile video consumption. The introduction of new ad units, including interactive and partial screen, will subsidize free content.

4.  The re-birth of Windows 7 mobile – The new and relatively strict hardware specifications introduced by Microsoft are geared towards providing a universal user experience much like Research In Motion (RIM) and Apple. Based on prior experience with the availability of too many phones variants, Microsoft is focused on restricting the use of its new operating system by phones that are not compatible. The re-birth of the Windows 7 mobile will further fuel the growth of mobile Internet and advertising.

5. New winner in the HTML5 vs Apps war – A lot has been said about how apps are expected to peak in 2013 and have already shown signs of slowing down. Though the new HTML offers great opportunities, apps and app stores continue to rule mobile content. The availability of basic functions of an app even without an active or stable data connection combined with the high level of usability and engagement offered by app stores make it a much more appealing option for customers. However, the fact that apps are device specific and limit penetration offers opportunities for experimentation that might lead to a decline in their popularity over the coming years.

6.  Location-Based Services (LBS) + Augmented Reality (AR) will be the leading integrated mobile technology in the market – The proliferation of GPS phones with digital compasses has already given rise to a series of location-based AR software platforms and applications. The combination of AR with LBS allows for graphic content related to the position of the user to be overlaid in real-time onto camera images taken by the phone. This makes for one of the most intuitive user interface currently available on mobile and also makes the consumption of location-based information a lot more fun. Such specific targeting will not only fuel ad spend but also transactions.

7.  Mobile micropayments will allow customers to pay from their ‘electronic wallets’ rather than ATM cards – The electronic payment industry is growing rapidly and provides significant opportunities for all electronic payment channels including those on mobile platforms. In developing countries, mobile banking services can address a service gap that is critical to their development. The key advantage of the introduction of mobile payment will be quick transactions. There are no credit card readers, no paper slips and more security than written forms. It will be like an electronic wallet that a customer will always have access to and will provide them with relevant purchase opportunities while they’re on-the-go.

8.  The re-emergence of mobile blogging – As mobile phones become more sophisticated and feature-rich, they are increasingly being used as a replacement for computers. With the introduction and adoption of tablet devices, the consumers now have greater speed, connectivity and battery life in their mobile devices. Several writers/bloggers are already using these devices to pen down their thoughts. With processing power that allows for editing and upload of content in various formats, these mobile devices are fast becoming the preferred travel gadget for professionals and have created opportunities for the development of a whole new set of user applications.

9.  Continued proliferation of smartphones and mobile Internet advertising – It is expected that by 2011 over 85% of handsets shipped globally will have browser capabilities. The relatively large growth in smartphones combined with their superior user interface will continue to encourage more people to access conventional websites on their mobile handsets. Business-to-consumer applications can be delivered using conventional Web tools as well as Web adaptation tools. As smartphone penetration increases, more users will possess the technology to view richer content on their mobile devices making the medium extremely useful for marketers.

10.  Mobiles will jump onto the 3D bandwagon – 3D technology is being incorporated in any and every gadget available in the market today. Mobile manufacturers have also experimented with the technology and Spice Mobility in India has already introduced a phone with 3D capabilities. Manufacturers still have a long way to go in terms of creating a sophisticated 3D mobile device but the market will see a lot more experimentation in 3D phones in the coming year. The technology will lead to the development of new content and advertising avenues.

Piper Jaffray analyst Gene Munster played 12 questions with Apple’s future and touched on a few key issues ranging from apps vs. HTML5, the enterprise plan and future smartphone competition.

We’re not going into all 12 questions—Munster is upbeat on Apple’s business; there are plenty of iPhone and iPad components and the campus extension is progressing well—but here are a few of the more notable items addressed.

What’s the impact on Apple’s iPhone launch on Verizon? Munster said that Apple’s move to Verizon will give Android significant competition. In other words, Munster argues that we’ll see what Android is made of. Munster said:

Currently, Android phones outsell iPhones in the US, but we believe when Verizon gets the iPhone that trend could be reversed. As an example, in countries where the iPhone is available on multiple carriers and competes with Android, we see the iPhone outselling Android. The greatest factor in the success of Android has been Verizon. Customers are loyal to their carrier, and once Verizon gets the iPhone, we believe Android’s success in the US will be tested.

My take: Munster is on target here. Android has benefited from all of Verizon’s marketing attention. As a result, Android and iPhone have walked on two different sides of the wireless street. When the iPhone hits Verizon there will be pent up demand.

Will HTML5 hurt the App Store? Munster said:

While HTML5 and other rich internet technologies will continue to improve, we do not expect web apps to approach the usability of native apps for several years. And by the time web apps are equal in function to native apps, this early stage of the smartphone wars in which the app catalog is essential, will be over. In other words, we do not see web apps as a threat to Apple’s competitive advantage in smartphones: its App Store.

My take: It’s far too early to declare the HTML5 vs. app fight. I’d argue that apps are the product of poor browsers and wireless bandwidth constraints. As 4G ramps and browsers improve, Web apps will look better.

Will Apple play the cloud game? Munster argued that consumers will want to access their content on any device without syncing. That’s a potential opportunity for Apple. “We expect that Apple will roll out some sort of cloud-bases content storage service, perhaps connected to its MobileMe service, by the end of 2011,” said Munster.

My take: This projection is a no brainer.

How enterprise focused is Apple? Apple is facing a massive tablet market—44.2 million tablets in calendar 2011 and 70.7 million in 2012—and business will tag along. Apple has positioned itself to “to fully go after the enterprise opportunity in the mobile space.” Munster said:

We expect the iPad, for example, to be widely deployed in the sales, hospitality, health care, banking, and manufacturing segments over the next several years. Moreover, we believe Apple is expanding its enterprise sales force to help generate and meet rising demand in the enterprise space.

My take: The iPad and iPhone are quickly becoming enterprise juggernauts. All Apple has to do is become a little more serious about it. The wild card is whether iPad and iPhone will pull the Mac into the enterprise.

1. Canvas – render graphics on the fly
2. Video – embed video without 3rd part plugins
3. Location – see where users are using cell towers, not IP address
4. Offline web apps – keep using apps locally, even without a web connection

See HTML5 Graphic