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.

Eric

Some people don't feel Wall Street analysts are always right? You got that right Jim. When a group of little old ladies in Iowa (or whatever midwest state they're in) can outperform the major stock indexes, I think I don't need a crowd to figure the wisdom of that point.
Kerryb

Couple of things the iPhone was introduced in 2007. Adobe was most likely aware of it's existence before this time due to the fact Safari needed a flash plugin designed specially for running on this mobile platform. The fourth generation iPhone will be upon us shortly and still there is now working flash plugin. As for sentiment and wisdom of the masses I doubt the 85 million iphone and ipod touch owners think twice about Flash not be part of that platform..

Lucas

Actually no, it did not. Because there is zero support for Flash in any form in the iphone OS. not as standalone or in Mobile Safari. Jobs didn't see a need for such support. And since that would be the only reason for Adobe to know anything, they most likely did not until the world did.

But you are correct that the high and continued sales of iphone OS devices shows that to Joe Q Public, the absence probably isn't even a small deal.

Add to this the number of sites making apps, moving to HTML5 etc and it really doesn't seem like an issue

Adobephile

Sorry Jim, but the "Wisdom of Crowds" is a profound fallacy. It's more akin to a "lowest common denominator" than anything else. Just because there seems to be some coincidence of poll results is no verification of "wisdom."

Well, at least you haven't resorted to tea leaf or entrail reading!

But whatever happened to "common sense"? Problem with that is that whatever is "common" these days has itself been in a veritable nose dive.

So what is there left? Just what Steve and company are doing: doing what you know is right and not wasting a whole lot of time and effort on explaining to anyone. If it's not obvious to any given individual, it's because they're operating on some other agenda of either chronic ignorance and/or vested interest.

Lucas

like stock analysts are really that wise.

In the end though, the 'wisdom of the crowds' is really better in a sense.

Ask yourself what audience something is designed for, based on what it can do. Then ask yourself if the sales show that the audience is buying into that design or not.

The ipad, for example, was clearly designed for those that want a portable device that doesn't have to have the full power of a notebook computer. Some that could be for getting emails etc, or for reading books, or playing games or whatever. Or even all of them (rather than carrying 5 devices each that does one thing). We are talking typical mid america "i don't care how it doesn't it as long as it does it and I don't need to get a college degree to run it" types. the meeks NOT the geeks of the earth.

1 million ipads were sold in 28 days. and that could have been even before the ipad 3g came out (something they didn't really clarify). but certainly just US only. That's pretty stellar.

And then look at all the businesses talking ipad,ipad, ipad. Hospitals, restaurants, airlines for in flight movie watching and such, schools, textbook companies making etexts and so on. Even companies like Amazon are supporting the ipad with apps for their ebooks so they don't lose all their sources of sales.

that's a pretty big crowd to listen to. Certain means more to me than whatever Wu and friends fart out and pass off as knowledge.