∞ Apple vs. Adobe: Using "Wisdom of Crowds" to track the battle

The ongoing battle between Apple and Adobe began to heat up earlier this year after it became clear that the iPad would not support Flash. The two companies brought the fight to the public in recent weeks, and I wanted to try a different approach to track how people feel about each of them, using the Wisdom of Crowds principle. To do this, I teamed up with Jett Winter, the CEO of Piqqem (pronounced Pick ’em), a company that uses Wisdom of Crowds to track company stocks. The basic principle is that the aggregation of information from the many is often more accurate than the information from a few.

Using sophisticated algorithms to parse the data, Piqqem captures what Winter calls Sentiment. That means that my vote for a company means as much as a Wall Street analyst, which appeals to some people who don’t necessarily feel that analysts always make the right decisions.

A long fight

The battle over Flash has been going on since the iPhone was first released. In 2008, during an Adobe earnings conference call, Adobe CEO Shantanu Narayen even confirmed that Flash would be available through the App Store.

Despite persistent rumors since then that Adobe would bring Flash to the iPhone, the company has never been able to satisfy Apple with the technology. In 2010, we are still without Flash for the iPhone OS.

With Apple’s expanding mobile product line, that means more today than it did then. We now have the iPhone, iPod touch and iPad all using the iPhone OS.

2010 signals the end of the road for Flash on iPhone OS

If there was any hope of Flash coming to the iPhone OS, that is surely gone now. In 2010, Apple launched the iPad without support for Adobe’s technology, which signaled to most technology watchers that it would never come to the platform.

After changing its iPhone Developer License Agreement in April, forbidding developers from using any other technology to build apps for the iPhone OS, Apple effectively killed Adobe’s plans to allow developers to build apps using Flash. In fact, Adobe said a short time later that it would abandon the technology.

With Steve Jobs and the founders of Adobe both speaking out publicly on the fight about Flash and who is more “open” with technology, a federal antitrust probe apparently started after Adobe lodged a complaint and with a new iPhone OS in the works, who does the average person think is winning this fight?

Wisdom of Crowds creates sentiment

By using the sentiment data collected from Piqqem over the last several months we can get a clear idea of how users from all walks of life feel about Apple and Adobe’s stock.

The above chart shows Apple’s sentiment lead growing from 15 points at the end of February to a dramatic 30 point lead as of May 14, 2010. We can assume that general market forces are already captured in both stocks, so there is no need to adjust for markets factors. Looking at this analysis, the scales are most certainly tipped in the favor of Apple. The war may be a long way from over, but based on current sentiment, Apple has delivered a blow to Adobe’s mobile Flash strategy.

Jett Winter, the CEO of Piqqem, contributed to this article.