Does “A VC” have a blind spot for Apple?

We don’t do formal take-downs of uninformed polemics here, but it’s a bank holiday today so we’ll take the case of “Does Apple Have A Blind Spot About Flash?” by Fred Wilson of Union Square Ventures:

Wilson: I think the news that Flash is coming to smartphones over the next year is a big deal.

“News”? According to various estimates and projections, Flash has already been on one billion cellphones (cumulative) and 40% of all new handsets shipped in 2008. I’ll leave it to Wilson to untangle all the versions of Flash/FlashLite and their respective limitations on any given mobile device. But it’s not for trying: Adobe has already struggled to make Flash a “standard” on mobile devices for several years now.

It’s the UI, stupid!

Wilson: Now almost every video site on the web uses a Flash video player. The same is true of audio.

The word “Flash” has become a Rorschach inkblot test. Mention the word and some may think it’s those annoying display ads. For others it’s audio/video delivery widgets all over the web. For a different demographic, it’s interactive casual games. For some e-commerce sites and enterprise intranets, it’s a drill-down data delivery platform.

Adobe has had a problem of defining and then decisively promoting Flash, FlashLite, Flex and AIR. Wilson is apparently bitten by this confusion. In userland reality, there is no Flash “player.” Sure, users have to download a web browser plugin, but once that’s done, the “playback” of audio/video media is, to Adobe’s credit, a fairly seamless part of a web page.

Codec != UI

So what’s so special about the Flash plugin then? Not much. In fact, as a simple audio/video delivery medium, nothing at all. It’s just H.264 video. Now what company is the principal promoter of H.264? According to none other than Adobe:

The broadest distribution of H.264 is via QuickTime from Apple, which is included in iTunes, iPods, iPhone, and the QuickTime Player on Mac and Windows. H.264 is also integrated into everything from mobile phones (Nokia, SonyEricsson) to HD-TV and Digital Radio. There is a wide range of interoperating products supporting this standard. Visit http://www.mpegif.org for updated news about H.264.

What did Adobe use for video prior to H.264?

Flash Player supports the Sorenson Spark video codec (based on H.263) and On2 VP6. H.263 is the predecessor of H.264 and was designed for teleconferencing applications, at 64k rates. H.264 delivers even higher quality at lower bitrates. H.264 will deliver the same or better quality when to compared to the same encoding profile in On2.

What Wilson perhaps likes about “Flash video” are the playback controls around the video and various UI widgets that display information about what’s being played elegantly. These, however, are design issues not necessarily technical advantages. Embedded H.264 playback can also be interacted with JavaScript UI controls and various sites, including Apple, have been doing it with QuickTime for many years.

It’s interesting to note that Adobe’s adoption of H.264 was greatly accelerated by Google’s arrangement with Apple to convert YouTube videos from various Flash codecs to H.264 for playback on the widely popular iPhone, and Microsoft’s impending “Flash-killer” Silverlight that featured HD quality video.

It’s the UI, stupid!

Wilson: It’s also true that a lot of the interesting new desktop apps like Twhirl and Tweetdeck are written for AIR, Flash’s runtime cousin for the desktop. I’d love to have apps like this on my smartphone too.

There’s nothing whatsoever about these apps that can’t be implemented on the iPhone without having to use Flash.

Flash is proprietary

Wilson: So it’s very exciting to me that Flash is making a big move over the next year onto smartphones. I’m also very excited to see Nokia and Adobe creating the Open Screen Project and Open Screen Fund to promote an open and consistent experience for web browsing and mobile apps across mobile devices. The mobile web needs to be just like the web for innovation to flourish and capital to flow.

I wonder if Wilson even reads the source material. Here’s what the press release says:

“The Open Screen Project Fund encourages the use of Adobe tools and existing developer skills to create exciting and unique Flash applications for millions of Nokia devices,” said Tero Ojanpera, EVP, Nokia Services.

Developers are invited to submit concepts for applications that are based on the Adobe Flash Platform, will run on Nokia devices… [emp]

Good luck with taking Nokia’s money to create “open” Flash apps that take unique advantage of, say, Palm Pre devices. After a decade, Adobe cannot even get the Flash player to run equally well on Mac OS X. So much for “openness.”

The open vision

Here comes Wilson’s most egregious misdirection:

Wilson: I believe Apple doesn’t share in Adobe and Nokia’s vision of an open and consistent experience for web browsing and mobile apps.

As we have covered previously in Runtime wars (2): Apple’s answer to Flash, Silverlight and JavaFX Apple’s answer to Adobe’s proprietary Flash is open HTML5. In fact, Apple has been by far the largest company dedicated to the promotion of open standards on the web. It’s contributions on HTML5 with <canvas>, CSS animation and various other interactive features duplicating many features of Flash have been exemplary. Its foundational work on WebKit is the reason why Nokia and Adobe themselves have adopted it as their mobile browser! It’s really preposterous for Wilson to mention Flash and “open” in the same breath.

Competition is Apple’s best friend

Wilson: It seems to me that Apple is interested in replicating its iTunes/iPod strategy it used to dominate digital music to dominate the mobile web.

What on earth might Wilson be referring to here? If “mobile web” refers to the iPhone accessing the web via Safari that would be WebKit, the same browser used by Adobe and Nokia and practically every other smartphone manufacturer other than Microsoft. If he’s referring to “native” apps accessing web services, we fail to see his point. All “native” apps running on a mobile device are by definition proprietary to that platform. Open source/native Android apps won’t run on iPhone, Nokia or Pre devices either. But all these apps, native or not, can and do access available web services. Flash-based propriatery apps that may run on multiple platforms bring no discernible advantage. After all, Java has already proved that the ability to run on multiple platforms alone doesn’t translate into user demand and popularity. Already “iPhone [is] making 51 percent of online ad requests among smartphones in the US, and 32 percent worldwide,” says AdMob.

The iPod-killer

Wilson: I don’t think the iTunes/iPod strategy has much life left in it. Things like Pandora, MySpace Music, music blogging, and other forms of streaming music will eventually chip away at that franchise.

Well, wake us up when that happens. Incidentally, while Pandora may work on 50+ devices, guess which platform is the most popular by far.

Wilson: …the mobile web is not going to be dominated by a single device and a single app ecosystem.

Frankly, Wilson hasn’t grokked the iPod/iTunes strategy. Apple didn’t win that war by eliminating all of its competitors, a la Microsoft. Apple, in fact, needs and exquisitely leverages competition so that the battlefield is sufficiently divided into the iPod and all the other iPod-killers. The trick is to equate a market segment with a product: people walk into stores to buy an “iPod” even when they mean to purchase a non-Apple product. The iPod has become a category definer, rendering its competitors irrelevant. The iPhone is in the process of doing the same, whether Wilson likes it or not. In Act II, there is the iPhone and all the other iPhone-killers. While the fat lady hasn’t sung yet to be sure, it’s Apple’s curtain to drop.

ipod-vs.png

Mobile web is and is not just the web

Wilson: I don’t even think an app ecosystem is the long term solution for the mobile web. It’s a bridge enviroment that allows for rich experiences on devices that don’t have reliable high bandwidth connections yet.

There’s very little connective logic among “app ecosystem,” “rich experiences” and “high bandwidth.” Actually, the gating factor for iPhone-class mobile devices currently is battery life, not bandwidth. Sure AT&T 3G coverage is spotty but a lot of iPhone-class device users have access to WiFi and do use it in abundance, as long as their batteries last. But what an app ecosystem has to do with bandwidth per se is a mystery to us.

Wilson: But the mobile web will eventually just be the web.

Yes and no. Yes, because for the iPhone-class mobile devices running WebKit, it already is. No, because user experience on a mobile device will always be different from desktop devices with larger screens, more computing resources, infinite power source and larger storage, but with little use for location, movement or environment-centric sensors.

Rich media is not Flash

Wilson: And a big part of getting it there is to get the tools that allow us to seamlessly consume rich media on the web onto mobile devices. To me that means Flash.

Once again, iPhone users are already consuming rich media as seamlessly as any other, notwithstanding the lack of Flash. The iPhone is about to become the largest mobile platform for games, perhaps the “richest” media experience we know. “Rich media” is not the same as Flash, especially in regards to video which in its H.264 glory is available on the iPhone, albeit without the proprietary Flash wrapper.

Flash versus Open

Perhaps one thing we can all agree on is that the future of the web, mobile or otherwise, will be more or less open. That would be HTML, MP3, H.264, HE-AAC, and so on. These are not propriatery Adobe products, they are open standards…unlike Flash.

In confusing codecs with UI, Wilson keeps asking, “why is it tha[t] most streaming audio and video on the web comes through flash players and not html5 based players?” The answer is rather pedestrian: HTML5 is just ramping up, but Flash IDE has been around for many years. Selling Flash IDE and back-end server tools has been a commercial focus for Adobe, while Apple, for example, hasn’t paid much attention to QuickTime technologies and promotion in ages. It’s thus reflected in adoption patterns.

Hopefully, this summary will clear Wilson’s blind spot:

Apple is betting on open technologies (as it makes money on hardware) while Adobe (which only sells software) is betting on wrapping up content in a proprietary shackle called Flash.

22 thoughts on “Does “A VC” have a blind spot for Apple?

  1. Pingback: How dogma begets anti-app myopia « counternotions

  2. Right, so the iPhone is a proprietary platform, allowing Apple to provide a single unified target for developers in the chaotic world of mobile devices.

    My point is that there is a very strong parallel here with what Adobe has with the Flash platform. In terms of developing an RIA, you could either build something using the Flash platform as a front end, or you could spend 10 times as long using Javascript and CSS and still have it look wonky on IE6. Sure, WebKit / HTML 5 is a step in the right direction, but it has the same achilles heel that Android does in the mobile sphere at this stage.

    For some reason you’re all about the iPhone since it provides a unified platform but down on Flash b/c its proprietary. Then when it comes to open source, you’re all about Webkit / HTML 5 cause its open but think Android’s going nowhere b/c its too fragmented.

    I understand that the parallel isn’t perfect, but I think the disparity in the mobile device world and be compared to the disparity in the differences btwn browsers.

    I also think you can make a pretty good argument that to the extent that Adobe has proprietary control over the Flash plugin, it is primarily in service of promoting a unified platform. The same way most Apple technology is built on open standards until the point where it undermines the ability to provide a consistent platform, I think its pretty clear also that Adobe is interested in moving towards open standards where it won’t undermine the integrity of the platform. For instance, I can use completely open source technology like Javascript or HaXe and FlashDevelop to write content for Flash without buying into some kind of Adobe scheme. I don’t even have to touch Actionscript, even though that conforms to ECMA standards as well. Adobe could easily have made this impossible if they wanted to leverage their proprietary control of the Flash plugin. Instead, like Apple, they understand that embracing open standards and declining to charge licensing fees on both ends helps to further the platform.

  3. glyf: “It seems that you lose your enthusiasm for open source if it happens to be Apple that’s standing in the way.”

    I’m not sure what you mean. Most of Apple’s products are built on open standards, from its OS X to H.264 to HTML to AAC.

    Apple takes an open standard and builds its own UI and connective tissue on top of it. Apple differentiates itself not at the file format/codec/standards level, but at the user experience realm built on top of them. I believe in that approach.

    The Android’s Achilles Heel piece exposed the necessarily fragmented nature of the open source Android in the name of choice. As I’ve said before, choice-first approach is detrimental to open source, or any other platform, for that matter.

    In There’s an App for That Joe Wilcox explains why a unified platform strategy is crucial to attract developer attention and build momentum. This is just the opposite of what Android’s doing.

    In contrast, WebKit is open source, even to Apple’s direct competitors Google, Adobe, Nokia, Palm, etc. But still as a package, in practical use, Mobile Safari is still the best mobile browser out there, which is what distances Apple from others.

    So I don’t see a contradiction here.

  4. @Kontra: I think you should take minute and recall your previous entry “Agora phone exposes Android’s Achilles Heel”. It seems that you lose your enthusiasm for open source if it happens to be Apple that’s standing in the way.

    As you pointed out, the advantages of keeping a platform proprietary have helped the iPhone distance itself from its competitors. The same is true of the Flash platform and the vast difference between it and its open source alternatives (although they don’t really qualify as such).

    I’m sure you’d agree that there are ups and downs to both approaches. Just try not to get too carried away on the Apple fanboy bandwagon.

  5. @Kontra While he is certainly correct that basically correct in that you can fancy-talk/marketing talk most words’ meaning to what best fits your needs, this doesn’t make it so in practice. Also I’m pretty sure that’s one of the reason shareware sucks so much on windows, cause small developers don’t profit from this “partner ecosystem” if it actually exists and profits anyone apart from msft.
    Taking the mp3 format as an example again: The fact that msft or someone else can pay for a license, doesn’t make it open in the slightest. However to anyone not in the know, it probably would seem “open” cause it is available to almost everyone on every computer, by default.

  6. Deanston: “The word ‘Open’ has been so misused and abused by MSFT…”

    Then you’ll love Ballmer’s definition from Mobile World Congress yesterday:

    “Open means different things to different people,” Ballmer said. “To some people, open means open source. It means more than that and different than that to me. Open can mean an open platform that people can extend, or it can mean open standards that are baked in. Ultimately the companies that succeed will be open, maybe in different ways and at different times.”

    To Ballmer, “open” refers to “the power and success of the partner ecosystem approach [that Microsoft] pioneered at the beginning of the PC revolution”.

  7. Pingback: Information vs. Judgement: A VC’s dilemma « counternotions

  8. Pingback: Information vs. Judgement: A VC’s dilemma « counternotions

  9. All I want to know is when is Adobe going to cease with the bogus press statements about how close they are to putting Flash on iPhone or how they are working so closely with Apple to get that done. Wishful thinking on a very large and public scale.

  10. Deanston: “[Apple] focusing on satisfying the ~50% consumers who could care less about having Flash on the phone.”

    This is the part the anti-Apple brigade misses. There are already 20-30 million users quite happy to pay a premium to own an iPhone without Flash. If the most popular smartphone in the U.S. can thrive without Flash, what does that say about the essentiality and inevitability of Flash?

  11. The word ‘Open’ has been so misused and abused by MSFT and Adobe that it no longer means anything so using it is pointless.

    All I can say is at least half the people hate Flash. So if Apple can rake in dough by having only 10% of personal computing market share, I think they can make enough money just focusing on satisfying the ~50% consumers who could care less about having Flash on the phone.

    The (somewhat) surprising news is Palm joining in on the Nokia/Adobe UI competition. Isn’t the purpose there to create some ‘common screens’ like how HTC ‘hacked’ the new WinMo to create a slicker, more compelling user homepage and other common UI across all phones? Does Palm plan to lock out webOS core functionality and APIs from Flash so it would not divide the potential developers as to which mobile app market to target? So if after telling the world you have the best phone OS, the best SDK, plus WebKit, yet still say you need Flash, what does that say about Pre? I know, you can argue Palm wants to give the user and developers the best of both worlds and hopefully attract twice the interest. Somehow I don’t think that will happen.

  12. @ Fred: I hope you did learn a lot. I particularly hope that you noted when the volleys between Dan & Kontra were finished the ball had hit the floor scoring a point for the Open side (and here’s the important point) … the open side is NOT Flash.

    There are plenty of folks out there who “KNOW” that the most evil technology company out there is: ______________ (Apple, Microsoft, Adobe, favorite villanous company here.) You name a company, somebody hates them.

    There are any number of fact based or emotion based reasons for hating just about any company that has ever done business. Any company that is worth anything has one primary goal – make money. So, let’s use the same enlightened self interest to determine what we think of them.

    Flash is about locking out competition and it is strictly Proprietary. Apple is working hard to make its products primarily standards based – where the internet is concerned. That makes me sympathetic to Apple. And for the record, I despise Adobe. But my sense of things has a lot more to do with my past life as a graphic artist and Adobe’s programming habits. Read a John Welch rant (or don’t if you’re uncomfortable with VERY “colorful” language) for more on Adobe.

  13. i learned a lot from reading the entire set of comments on my post and this post summarized most of the negative comments pretty well.

    but i sure wish i had Dan Kantor edit my post before i wrote it because he states my issues with Apple better than i did and in a technical way.

    i’m not a technologist, i am an observer of and an investor in technology.

    i’m a way bit smarter one this morning so thanks for all of this

    fred

  14. Sorry to be petty, but this caught my eye:
    iPhone is about the become the largest. The first “the” should probably be to.

    Kontra: Fixed. Much appreciated.

  15. Dan Kantor: “If Apple found a way to do the same thing for all video and audio players on the web that it did for YouTube, things would be great.”

    There was a time when you couldn’t reach a site without going through its Skip Intro splash page. Remember those days? The internets move along the technology and trends curve. The two most important OS provider websites on the planet, AAPL & MSFT, won’t have any traces of Flash soon. You couldn’t necessarily predict that just a few years ago. The vast majority of audio sites used to require RealPlayer. Not so much any longer. Things change. Apple is a very patient company. Once the iPhone is established as a must-serve platform, and it’s already half-way there, publishers will necessarily move to open standards.

  16. Kontra: The trouble begins when you write against proprietary Flash and expect support.

    The point that Fred was making is that this has already happened. All the video and audio on the web is Flash. While I like the fact that when I come across a YouTube video on the iPhone, I can click and watch it in the native app, I can’t do the same for Vimeo or any of the other video players out there. If Apple found a way to do the same thing for all video and audio players on the web that it did for YouTube, things would be great.

  17. Dan Kantor: “now that all apps are native, it gives Apple a huge lead.”

    Yes, it does; 20,000 apps downloaded half a billion times would do that.

    But again, if, as a developer/publisher, you don’t want to have anything to do with native apps, then you don’t have to. Develop against HTML5 and you still have the best browser. The trouble begins when you write against proprietary Flash and expect support. Why would/should Apple subsidize Adobe that way, especially after 25 million people showed their willingness to part with their own money to say Flash doesn’t matter?

    “[Pre has] APIs that allow access to all the functionality the phone has to offer.”

    This is far too early to assess, obviously, in terms of performance and reach. It could be Pre’s edge.

    Apple, however, could easily give similar access to the hardware via JavaScript APIs, if it saw a credible competitive advantage. As you know, Google already uses one such non-public API to access the proximity sensor using JavaScript to conduct audio search on the iPhone.

  18. Agreed. I was more excited than anyone when Apple announced the web as their app strategy. I was disappointed when they sort of ditched that for the app store.

    They have added a few web features since the beginning – sqllite, full screen support, home screen icons, css animations. But no one noticed and no one uses these features. If they add audio, video, camera access and location access, developers will notice.

    The app store does do one thing very well – showcase apps. It is almost easier now to have a user notice your app in the app store than to type in your url. Clearly, all the other device companies have noticed this.

    I am very excited for the Palm Pre. The early word is that it’s the best of both worlds. ‘Native’ apps are just html/js/css, but they have APIs that allow access to all the functionality the phone has to offer.

    A colleague of mine subscribes to the evil Apple theory. His point is that now that all apps are native, it gives Apple a huge lead. If all these apps were web apps, then Android and Pre would not be at the disadvantage they already find themselves.

  19. Dan Kantor : “So far Apple has not enabled the HML5 and tags on the iPhone.”

    So far. :-) Apple has every incentive to keep Safari as the best mobile browser, and I suspect they will.

    As you know, when Apple suggested “the web” as the platform of development on the iPhone at its introduction, developers were the ones who disagreed the most. They are the ones who wanted native apps. Wilson skips this part and perhaps sees this as a plot by Apple to erect a walled garden, one which is doomed to fail. Apple probably thinks it can’t please everyone. :-)

  20. I mostly agree with you but I do want to raise one point. So far Apple has not enabled the HML5 and tags on the iPhone. The latest Safari on the Mac enabled these and they can be scripted with javascript. They can even be animated with css3. Not the case with the iPhone.

    While the iPhone has enabled many HTML5 features including SQLlite, they have yet to enable the ‘rich’ media aspect of it. Maybe it is because they want to standardize the way audio and video is presented. Either way, developers like Pandora cannot build their application in the browser alone. They have to build a native app. Fred probably sees this and comes to the conclusion that if the iPhone had Flash, Pandora and all the other audio and video sites would create their experiences within the browser and not have to be native. Whether this ends up being in Flash or HTML5, companies and consumers will all benefit when all the smartphones implement one or both.

  21. While I basically agree with you, just wanted to say I wouldn’t excatly call the mp3 format “open”, as it’s probably one of the audio formats with the most patents on it, and windows/os x only can play it cause the microsoft/apple pay royalties. I’m not quite sure, but iirc at least AAC/MP4/H.264 is at least more open, but MP3 alas, is not.

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