Adobe SystemsInc. (ADBE) has signed an agreement to acquire Nitobi Software, the creator of HTML5 mobile app framework, PhoneGap and PhoneGap Build. Financial terms of the deal were not disclosed.
PhoneGap allows developers to build cross-platform mobile applications with HTML5 and JavaScript. Till date, PhoneGap’s open source framework has been downloaded more than 600,000 times and thousands of applications have been built using PhoneGap on Android, iOS, BlackBerry and other operating systems.
With Nitobi under its umbrella, Adobe users can develop mobile apps using HTML5 and JavaScript with PhoneGap or Adobe Air and Flash. The acquisition complements Adobe’s already broad family of developer solutions, including Adobe AIR, which utilizes Flash. Publishers and developers will now have many choices, with hot new platform and device applications in the Adobe suite.
The acquisition is expected to close by October and all Nitobi employees in Canada will join Adobe.
While Adobe’s technological prowess is commendable, Apple Inc (AAPL) and later Microsoft (MSFT) refused to use its Flash technology in 2010, choosing HTML5 for their mobile devices instead. The main complaint against Flash has been that it is unstable and eats up capacity and power. For some time now, Adobe has been offering tools that are HTML5 compatible. However, the acquisition suggests a more aggressive move, which is well warranted, considering the emergence of the mobile era and the difficulties related to Flash. Adobe needs to move with the demands of the market and that is exactly what it appears to be doing.
Adobe’s strategic acquisitions and continued innovation seem to be paying off. Together, these have given Adobe its strong market position on which we remain highly optimistic. The EchoSign acquisition in July brought on board leadership capabilities in electronic signatures, which helped it to reduce time, costs and complexities associated with traditional signing methods. In October, Adobe also acquired TypeKit, which offers Web designers a wide array of fonts on their sites.
Currently, Adobe carries a Zacks #3 Rank, indicating a short-term Hold recommendation.
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