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Adobe Signs First Flash Deal on Mobile Phones

Posted on: Thursday, 6 April 2006, 08:05 CDT

SAN FRANCISCO -- Adobe Systems Inc  unveiled a deal on Wednesday with Verizon Wireless, the second largest U.S. wireless provider, to build Flash animation software into Verizon mobile phones.

Adobe, which did not disclose financial details or potential launch dates, said the agreement will make Verizon the first wireless operator in the United States to offer mobile phones with built-in Flash technology.

Flash is software used to design animated graphics, slick Web sites, video games, movies and advertisements on the Web.

The new service will allow customers to more quickly view graphic images on their screens. For Adobe, it pushes the company beyond computers and into the potentially lucrative mobile phone market, Adobe Vice President Gary Kovacs said.

"This is the first U.S.-based Flash service for mobile phones," he said. "It will be much easier to get at data."

Pacific Crest said in a research note that the deal marks a significant win for San Jose, California-based Adobe. It will help the company strike more deals with other carriers in the United States.

Mobile phone companies in Japan such as NTT DoCoMo Inc. already offer Flash content but Pacific Crest said success in the United States could give Adobe a big revenue bump.

Steve Lidberg estimated that the move into mobile phone animation could double the number of software programmers using Flash from its current base of 1 million developers. That could translate into about $1 billion in additional revenue for Adobe, the Pacific Crest analyst forecast.

The deal fulfills one of the goals spelled out by Adobe when it acquired Macromedia for $3.4 billion late in 2005.

Macromedia complements Adobe's strength in editing and distributing fixed content such as text, photos, and graphics. Macromedia has the top position in animation tools for creating graphics and advertising.

Shares of Adobe lost 26 cents, or less than 1 percent, to trade at $35.95 in afternoon trading on Nasdaq. After trading above $40 earlier in the year, the stock has fallen back to trade at levels roughly unchanged from the end of 2005.

Source: By Michael Kahn/Reuters

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