Adobe Systems Inc is halting development of its popular Flash Player for use in mobile browsers, essentially admitting defeat to rival Apple Inc in a long-running battle over Web standards.

The decision by the software maker, whose shares fell more than 11 percent, means that Web developers will probably stop using its Flash tools to produce video, websites and applications for delivery over mobile browsers.

That would be a relief for tens of millions of iPhones and iPad users whose browsers are not capable of viewing content built in Flash, but it could hurt sales of Adobe's tools for developing websites.

Instead, Adobe said on Wednesday that it would focus on selling tools for website developers that use an emerging set of Internet standards known as HTML5, which Apple has long promoted.

Adobe announced the shift after saying late on Tuesday that it planned to lay off about 7 percent of its staff and warning investors that revenue growth would slow over the coming year as it shifts to a new sales model.

While the difference between Flash and HTML5 might seem like inside baseball for the average person, it was of keen interest to legendary Apple co-founder Steve Jobs, who died recently.

Jobs refused to build Flash technology into his company's mobile browsers, insisting that they offered an inferior browsing experience. Adobe refuted those claims and sought to pressure Apple to incorporate Flash into iPhones and iPads.

HTML5 has taken off since Apple refused to adopt Flash because developers who used Adobe's proprietary technology did not want to miss out on getting their content viewed by iPhone and iPad users. The newer technology also uses open standards, which means that a single company like Adobe does not have control over the technology.

Steve Jobs kicked the industry forward a notch toward HTML5, said BGC Partners analyst Colin Gillis. Open-source always wins, even it doesn't mean innovators are going to make money on it.

Adobe conceded in a blog item posted early on Wednesday that HTML5 had become the preferred standard for creating mobile browser content.

HTML5 is now universally supported on major mobile devices, in some cases exclusively, Adobe Vice President Danny Winokur said in the blog. This makes HTML5 the best solution for creating and deploying content in the browser across mobile platforms.

He said the company would continue to invest in Flash technology for use in mobile applications that would run on devices through its Adobe AIR platform. To access those applications, a user must first install Adobe's AIR software.

Shares of Adobe were down 11.1 percent at $27.04 in morning trading.

(Reporting by Jim Finkle in New York; Additional reporting by Yinka Adegoke in New York; Editing by Lisa Von Ahn)

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