Apple eases app restrictions, Adobe shares jump
SAN FRANCISCO (Reuters) - Apple Inc is easing restrictions for building iPhone and iPad applications, a move that should allow for the use of third-party tools such as Adobe Systems' Flash software and ease tension between the two companies.
Shares of Adobe surged more than 12 percent on Nasdaq on Thursday, after Apple announced the changes.
Apple's about-face follows a high-profile spat with Adobe last spring that saw Steve Jobs sharply criticize Flash technology.
Apple had been criticized by developers for what they called onerous restrictions on building apps. Apple had effectively banned developers from using the popular Flash software and other technology to build apps for iOS, the operating system that powers the iPhone and iPad.
Gleacher & Co analyst Brian Marshall said Apple was feeling pressure from app developers. Because of Apple's restrictions, many developers had to spend time and money to build separate versions of apps to work on both iOS and Google Inc's Android smartphone platform, which has surged in popularity.
"What spurred this on was the uproar from the growing iOS developer base," Marshall said. "People liked using Flash, and now they'll be able to use a bunch of different technologies."
Apple's initial insistence that developers only use its tools to build apps also drew scrutiny from U.S. regulators.
But Apple said it will relax "all restrictions on the development tools used to create iOS apps, as long as the resulting apps do not download any code. This should give developers the flexibility they want, while preserving the security we need."
Analysts say the changes mean developers will be able to build apps using Flash tools, and then convert them to run on iOS, something that was not previously allowed. It should also allow them to build an app and more easily port it to either iOS or Android.
However, analysts say the changes do not mean that the iPhone and the iPad will be able to run Flash-based websites. Jobs has slammed the Flash technology as unreliable and ill-suited for mobile devices.
Apple, which did not mention Adobe or any other companies in its press release, did not respond to requests for additional details about the changes.
"We have listened to our developers and taken much of their feedback to heart," Apple said in the release.
Adobe issued a statement saying "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."
Hudson Square analyst Daniel Ernst said Apple's previous restrictions on app-building tools never made sense if the company wanted to make it as easy as possible to lure developers to the iPhone and the iPad.
"That never seemed like a great idea in the first place, and the marketplace gets to decide," he said.
Apple had previously argued that apps that were not built specifically for its devices simply would not work right.
In a bid to be more transparent, Apple also on Thursday made public for the first time App Store Review Guidelines, to help developers understand how submitted applications are considered.
This had been another controversial area for some developers who had complained that the approval process has been opaque and arbitrary.
In the guidelines, Apple made clear that it would not allow apps it considers offensive, including those that criticize a religion or contain certain sexual content.
The introduction to the guidelines states: "If your app doesn't do something useful or provide some form of lasting entertainment, it may not be accepted."
It also states: "If your app looks like it was cobbled together in a few days ... please brace yourself for rejection."
The App Store, made popular by the success of the iPhone, has distributed over 6.5 billion downloads from over 250,000 different apps since its debut in July 2008, making it the world's largest mobile application platform, according to Apple.
But Google CEO Eric Schmidt has said in recent weeks that devices based on its competing Android wireless operating system are being activated at a rate of 200,000 a day, making it a strong rival to the iOS system.
On Nasdaq, Apple shares closed 0.06 percent higher at $263.07, while Adobe rose 12.1 percent to $32.86.
(Reporting by Gabriel Madway and Yinka Adegoke; Editing by Derek Caney, Gerald E. McCormick and Richard Chang)
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