Why Steve Jobs is Playing Tough With the iPhone

Jean-Louis Gassée is a Silicon Valley veteran and currently general partner for the venture capital firm Allegis Capital in Palo Alto..

Who in his right mind expects Steve Jobs to let Adobe (and other) cross-platform application development tools control his (I mean, the iPhone OS's) future? Cross-platform tools dangle the old "write once, run everywhere" promise. But, by being cross-platform, they don't use, they erase "uncommon" features. To Apple, this is anathema as it wants application developers to use and promote its differentiation. It's that simple. Losing differentiation is death by low margins. It's business. Apple is right to keep control of its platform's future.

The longer version:

The upcoming 4.0 release of the iPhone OS will come with licensing language that prohibits the use of Adobe's Flash-to-iPhone compiler. The compiler is a clever way around the absence of a Flash interpreter on Apple's smartphone OS. It takes Flash code in and outputs iPhone OS code, allowing Flash content and apps to run on the iPhone (and iPad). Problem solved.

Not so fast, says Apple; we'll only allow applications that are written "natively" with our tools. No cross-platform tools, no Flash-to-iPhone compiler, no Flash.

Less than 24 hours later, an Adobe employee, Lee Brimelow, posts a virulent critique of Apple's latest prohibition, titled "Apple Slaps Developers In The Face". He concludes with a vigorous 'Go screw yourself Apple' and then adds a postscript: 'Comments disabled as I'm not interested in hearing from the Cupertino Comment SPAM bots.' Ah, yes. The one-way mirror…

[What the irate gentleman fails to say is this: The only developers slapped in the face are those who don't use Apple development tools because they want to write a cross-platform app that may or may not use the particular features of the iPhone OS.]

He's not alone in condemning Apple. In his blog, called "Why does everything suck?," Hank Williams asks if "Steve Jobs Has Just Gone Mad" and wonders about "Insane Restraint of Trade".

Adobe appears to be worried.

In its latest SEC (Securities and Exchange Commission, the stock market regulator) filing, the company admits that its 'business could be harmed'. If Apple succeeds in turning developers away from Adobe's tools, a new version of which, CS5, is about to be announced, well, the money pump will stutter.
There are calmer minds, however. In his highly-recommended blog, Daring Fireball, John Gruber explains why Apple changed the iPhone OS licensing agreement. It's strategic, really: Apple doesn't want anyone else to have control over which OS features the applications have or don't have access to. I'll explain in a moment why it's rational for Apple to fend off cross-compilers, and why it's not too rational for Adobe employees and others to criticize Apple for keeping control of its future. But first, a bit of history.

Apple and Adobe are an old couple, going all the way back to the early Mac days. Adobe had created beautiful fonts, a PostScript interpreter, and had absorbed Aldus for its seminal program, PageMaker. That's how the LaserWriter was born and the era of desktop publishing began. Besides being crucial to the Macintosh by creating so much desktop publishing software, Adobe also acquired and published Photoshop in 1990, at first exclusively on the Macintosh.

One is tempted to say that without Adobe there would be no Macintosh and no Apple. Steve Jobs and John Warnock, one of Adobe's founders, were close, even if things didn't always go swimmingly. An Apple engineer, Gifford Calenda, began to develop TrueType, an alternative to Adobe's "mathematical" fonts. I was at Apple when we had to make the buy-or-create decision. The basic set of Adobe fonts cost about $30, if memory serves. If Gifford and his colleagues succeeded, which they eventually did, we could get our fonts for "free". To make sure the fonts got industry-wide adoption, Apple licensed the TrueType technology to Microsoft for free. The business model wasn't font revenue but Adobe license fee avoidance. Adobe, understandably, wasn't too pleased with this.

Sometime during the mid-nineties, fearing the Mac wasn't going anywhere, Adobe made Windows its priority. Adobe's key applications were first written for Windows and then adapted for the Mac. This continued even after Jobs' "reverse acquisition" of Apple, when he brought NeXT technology and people to breathe new life into the Mac OS (but without Adobe's Display PostScript, the engine behind the NeXT graphics system). Today, much to Apple's persistent chagrin, the Mac version of Photoshop is written on an older version of the Mac platform, and the result is perceived as being inferior to the Windows version.

Coming back to cross-platform tools, Adobe created PDF, the Portable Document Format, and the editing and rendering Acrobat and Acrobat Reader programs. Running "everywhere"-on Windows, Mac and Linux and, later, on mobile platforms as well-PDF became the standard for presentation-quality documents. (Microsoft tried to kill PDF with its XPS format but failed.) Ironically, Apple 2.0 wholeheartedly endorsed and licensed the PDF format. You don't really need Adobe programs (Acrobat Pro, about $380, and the free Acrobat Reader) to read or edit PDF files on a Mac. All Macs come with a multi-format document reader called Preview, a neat program that reads, edits, annotates, combines PDF files, and "converts everything into everything".

In 2005, to finish our simplified history walkthrough, Adobe acquired Macromedia, a multimedia and Web development tools company. Adobe's technical and market strength made Flash and related tools the de rigueur platform for multimedia content on the Web. A true industry standard, 85% or more of all Web sites use Flash. People are trained on it, the content creation and distribution tools exist and they work reasonably well.
So what's Apple beef with Flash?
Focusing solely on the iPhone, it seems Apple doesn't like Flash
for two reasons: performance and strategy. The former is possibly fixable, although far from a sure thing; the latter is absolutely unresolvable and lies at the heart of the conflict. With Flash, Adobe wants to win the Platform War-not a skirmish, not a battle, the whole thing.

Picture the paper roll that carries instructions for a player piano. All the player piano manufacturers agree to a standard format for the roll and, as a result, you see a great quantity of good music punched into the format. A company, let's call it PPP (Player Piano Platform) automates the transcription of sheet music into industry-standard cross-platform rolls.
But, you think different. You invent a player organ. The standard rolls will play on your organ but they can't control the stops and registers and multiple keyboards, so you depend on the goodwill of the PPP company to create a new, expanded roll format that makes full use of your player organ's features. There are Beethoven symphonies adapted for single keyboard player pianos, they sound terrific… If only they were reorchestrated for your player organ. But no dice, the PPP company sticks to its common set of cross-platform features that are found on all player pianos.
I think I've belabored the metaphor enough.

Steve Jobs has seen enough in his 34 years in the computer business to know, deeply, that he doesn't want to be at the mercy of cross-platform tools that could erase Apple's competitive advantage. He doesn't want to wait and beg and bitch and moan until Adobe supports the registers on Apple's player organ. (Diplomatically or not, Jobs recently called Adobe "lazy"… But that was intra muros, in an internal all-hands company meeting.)

Does anyone mind that Jobs won't sacrifice the truly strategic differentiation of the iPhone platform on the altar of cross-platform compatibility? Customers and critics don't. They love the end-result. Nor do developers. There are 185,000 apps in Apple's App Store, 3,500 already for the iPad. Philanthropists at Kleiner Perkins, the noted Valley VC firm, are doubling (to $200M) the size of their iFund, a fund dedicated to iPhone and now iPad investments.

Let's perform a thought experiment. By the end of 2010, there will be more than 100 million iPhone OS devices (iPod Touch, iPhone, iPad). You're the webmeister at an important content site. The boss comes in and asks you why you're not supporting the iPhone OS devices. 'Our stuff is all Flash-based, chief, those guys don't run Flash'. You're about to become the ex-webmeister. The boss, a really patient sort, asks you to "think different" about all these "non-compliant" customers, each of whom has an iTunes account backed by a credit card, and has developed the habit (encouraged by Apple) of paying for content. So, one more time, with feeling: What's your answer?

By Jean-Louis Gassée
Special to CBSNews.com