Apple to Relax App Store Rules, Benefiting Adobe

Apple To Publish App Store Guidelines
A man checks the application menu (apps) displayed on the screen of Apple Inc.'s Apple iPhone. Photographer: Jason Alden/Bloomberg

Apple Inc. said it will give software developers more leeway in how they create applications for its iPhone and iPad, a move likely to benefit Adobe Systems Inc., whose software had been panned by Apple’s Steve Jobs.

Apple will publish review guidelines for its App Store for the first time and drop restrictions on the development tools used to make applications for the iOS operating system, which runs its devices, the company said in a statement today. The company earlier this year said it would not accept applications made with tools from other companies, including Adobe.

“Developers had been telling Apple that they felt they were being required to jump through too many hoops,” said Richard Doherty, head of The Envisioneering Group, a technology analyst firm based in Seaford, New York. “To its credit, Apple listens to its developers.”

Apple’s restrictions in its App Store, the exclusive place to get apps for the iPhone and iPad, have drawn criticism from other companies. Adobe complained about Apple’s policies to antitrust regulators, who have been considering an investigation of Apple, people familiar with the matter said in May.

The shift makes it easier for developers to use Adobe tools to build mobile applications for the iPhone and phones that run the Android operating system backed by Google Inc., said Michael J. Olson, an analyst with Piper Jaffray & Co.

Adobe Surge

“The changes will likely allow creative pros to use Adobe’s tools to build apps for the App Store,” said Olson in a research note today. “We believe it also solidifies the likelihood that Adobe’s creative tools will be used to develop for all platforms and devices.”

Adobe rose $3.55, or 12 percent, to $32.86 at 4 p.m. in Nasdaq Stock Market trading, the biggest gain since October 2008.

Apple has so far refused to allow Web video and animations created with Adobe’s Flash technology to run on the iPhone and iPad. In a 29-paragraph public letter in April, Chief Executive Officer Jobs said Flash had “major technical drawbacks.” Apple’s statement mentions no changes in that policy.

“We are encouraged to see Apple lifting its restrictions on its licensing terms, giving developers the freedom to choose what tools they use to develop applications for Apple devices,” Adobe spokeswoman Jodi Sorensen said in an e-mailed statement.

Apps, Websites

While Apple’s announcement affects development of apps for the app store, it doesn’t touch on the use of Flash on Apple’s iPhone Web browser, Olson said in his note. “Websites that use Flash will still not work on Apple’s devices,” he wrote.

Natalie Kerris, a spokeswoman for Apple, didn’t immediately return messages seeking comment.

Software developers beyond Adobe had complained about the lack of clear rules for App Store programs, said Doherty. Publishing guidelines for the store will make the process for approving or rejecting apps more transparent, he said.

Since the App Store’s debut, developers have said they don’t understand how Apple decides on apps. In one case, an iPhone app for Google Voice, a Web-based phone service from Google., was not allowed in the app store, prompting a series of inquiry letters from the Federal Communications Commission to Apple, Google and AT&T Inc., the exclusive wireless carrier for the iPhone in the U.S.

Omar Hamoui, vice president of product management at Google, posted a statement on the company’s blog after Apple’s announcement.

‘Great News’

“This is great news for everyone in the mobile community, as we believe that a competitive environment is the best way to drive innovation and growth,” he wrote.

Apple offers more than 250,000 applications for the iPhone and iPad in the App Store and the programs have been downloaded 6.5 billion times. App Store developers have collectively earned more than $1 billion from the sales of their apps, Apple said today.

Apple rose 15 cents to $263.07 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have risen 25 percent this year.

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