Adobe Declares Its Love for Apple, but Apple Loves Chips More

You can read it in major newspapers across the country: Software maker Adobe Systems (ADBE) took out high profile, full-page ads in The Wall Street Journal and other papers Thursday that proclaimed its undying love for Apple (AAPL).

The ads were more than a bit tongue-in-cheek, closing with a kicker that stuck it to Apple for preventing developers from using Adobe tools to write applications for the iPhone and the iPad. The recent move against Adobe by Apple CEO Steve Jobs also keeps Adobe's Flash software language off those two burgeoning platforms.

By extension, this adds momentum to HTML5, the latest version of the venerable hyper-text markup language code that underpins the Internet. HTML5 is aiming to displace Flash as the tool of choice for developers seeking to create highly interactive Web content.

AdobeWas Slow to Support OS X

Adobe appears to be losing the PR battle in this fight. A number of prominent bloggers pointed out the irony of how, in the early days of Apple's Unix-based OS X operating system, Adobe refused to support the platform just when it needed help the most. Others have pointed out that no one gets worked up in a lather about open standards on hardware platforms unless it's a platform that everyone wants to make money on. John Gruber at Daring Fireball ran through a very logical technical explanation for why Apple would want to keep Flash off the iPhone.

Steve Jobs himself posted his complaints against Adobe on the Apple site: "Adobe has been painfully slow to adopt enhancements to Apple's platforms. For example, although Mac OS X has been shipping for almost 10 years now, Adobe just adopted it fully (Cocoa) two weeks ago when they shipped CS5. Adobe was the last major third-party developer to fully adopt Mac OS X."

Perhaps Adobe is trying to fuel the fire to keep regulators interested and add momentum to a rumored early stage antitrust investigation into Apple. But that investigation is a long-shot by any measure. The iPhone occupies less than 50% of the smartphone market. Google's (GOOG) Android operating system continues to gain ground. In the tablet PC market (the closest comparison to an iPad), Apple faces tons of competition -- it's hardly close to a monopoly for a product it introduced just last month.

Apple on Semiconductor Acquisition Path?

But an even bigger game may be afoot here. Apple has been hot on the acquisition path of late, including semiconductor buys. These acquisitions have raised speculation that Apple may be intending to swim upstream in the chip universe and start to bring significant chunks of its silicon fabrication in-house as Apple's own sales continue to scale.

For sure, Apple understands that the fat profit margins Intel (INTC) makes on the silicon chips it sells to Apple would drop quite nicely to the bottom line in Cupertino. And Apple has shown a much greater taste for vertical integration with expansions into retail, advertising, big data centers, Software-as-a-Service (iTunes and AppStore), and now hardware.

More Apple silicon chips inside the iPad and iPhone would probably translate into new tools for developers required to maximize the features of the new semiconductors. And if Apple were saddled with a host of flash applications running on its devices, then it would be a far messier transition to the new chip. And that may be the real meat behind Steve Jobs's complaints that Adobe's Flash has technical difficulties.