In my last article, I talked a bit about some of the challenges that Apple and its iOS developers are going to face in the future as applications for iOS begin to take advantage of the pixel density in the Retina display on the iPad and the iPhone.
To recap, the inclusion of retina-optimized content on the new iPad, which takes the form of high-resolution bitmap images and video has brought about a condition which I'm affectionately referring to as "App Obesity."
To store images at double the previous resolution (from 1024x768 to now 2048x1536) it requires approximately four times the storage space as it did before. This results in flash memory being consumed very quickly on 16GB and 32GB devices.
This storage problem not only affects the new iPad, but it also affects the previous generation models as well as iPhones, particularly as developers move towards "Unified" application binaries for iOS devices as opposed to discrete versions which contain the graphic assets for all the target form factors.
There are two ways in which this problem can be addressed. The first is the most unlikely, in that Apple finds a way to get the costs of flash memory down so that we can quadruple the storage capabilities of iOS devices without significantly increasing the BOM (Bill of Materials) of the device.
Apple has already made a very visible purchase in Anobit, an Israeli flash memory technology company, for a cool $500 million. But the Memory Signal Processing (MSP) technology that Anobit brings to Apple is more along the lines of improving the reliability, endurance and performance of flash memory, not actually increasing the flash memory density itself.
While it's certainly possible that Anobit's MSP could be combined with data compression and de-duplication algorithms in order to make the most of existing storage while leveraging the power of the A5X and future Apple SoCs in embedded firmware, I don't forsee it being able to do it on a factor of four or more.
And while Apple has used its cash reserves in the past to make up front purchases of flash memory to control its supply chain (and thus keep the BOM under control) I don't see them buying a flash memory manufacturer and putting billions of dollars into technologies that might help reduce the overall cost of flash by more than half.
This strategy, while not outside financial means for Apple would still be very messy. It's also out of character for being a traditionally "fabless" company (for at least the last 10 years) and certainly would be a very long term investment.
Short of a density and cost-reduction miracle occurring with commodity flash memory in the next three to five years, the next way of skinning the App Obesity cat is to actually optimize the apps themselves.
In my previous piece I discussed how moving from a bitmap-oriented content asset-based programmatic model to a vector-oriented one could drastically reduce the amount of storage required for mobile applications.
While not all of the content in every application will be able to be "vectorized" a substantial amount of storage savings can definitely be achieved, and it doesn't require altering the fundamental hardware technology to do it.
The problem is that the tools that are used to create vector-based (and bitmap) assets are largely owned by other companies.
The big fish in this pond is Adobe. Yes, we all know that Apple and Adobe have been sparring for the last several years, particularly as it relates to interactive Web content standards. Flash animations and Flash videos are an anathema to mobile, and the proven success of the Flash-less iOS platform has essentially driven it to an early grave.
And in terms of paint/bitmap editing and high-definition video production, Photoshop/Lightroom/After Effects and Premiere are among the most popular applications used among creative content professionals.
Arguably, there is some overlap with Apple's own Aperture, iMovie and Final Cut Pro in this space, but they really address two different markets.
I also think that it goes without saying that having Adobe's full range of content creation tools in Apple's stable would also further greatly cement the value of developing for the iOS (and Mac) ecosystem relative to competing platforms, as the price of these tools would likely go down dramatically once integrated into the Mac App Store.
But buying Adobe would not be a small feat for Apple. Adobe (ADBE) is currently capitalized at around $17 billion, and would probably fetch a bit upwards of that. Yes, Apple can definitely afford it, but it's questionable as to whether Apple actually needs all of Adobe, and there may be a bunch of regulatory headaches involved if they were really serious about the purchase.
Not to mention the fact that a substantial amount of bad blood exists between the two companies.
There is another company, however, which has many of the kinds of content creation assets Adobe has but would cost a lot less money and would have no such regulatory or emotional headaches: Corel.
If you closely examine Corel's product line, it's actually quite impressive. Corel is also a private company, and with annual revenues of around $100-$250 Million, even purchased at four to ten times earnings Apple is really only looking at about a billion dollars, worst case.
That's chump change when you've got $100 billion in cash sitting in the bank.
There are only a few negatives involved in a Corel purchase. First, the company is Canadian and not Silicon Valley-based like Adobe, so there would clearly be some major corporate culture adjustments required to integrate the company.
Second, the majority of Corel's apps are Windows-only. But it could be argued there is probably more than enough back-end code and ICAP that even spending $10M-$50M on porting their major software assets (such as CorelDRAW) to native OS X would be well worth it.
And it is clear that the folks at Corel already possess the know-how in order to write Mac and OS X apps.
And while there is definitely some product overlap, it's not as big as Adobe's, and the few products that Apple wouldn't likely be interested in (WordPerfect suite, etc.) could be sold off to someone else or run as independent businesses.
There are certainly other smaller firms such as Xara which have toolsets similar to Corel's that could also be acquisition targets for Apple, but in terms of overall value, they don't really compare.
Does Apple need to own robust content creation and optimization tools in order to fight App Obesity and to continue to develop their software ecosystem? Talk Back and Let Me Know.