As we obsess about the third screen, the first screen tries to eat the second one whole.

The New York Times (which lost $74 million in Q1, for those of you who are keeping score) reports that Adobe CEO Shantanu Narayen is planning to announce that televisions and set-top boxes that support Flash will be available later this year. As TVs become more and more optimized for online content, the natural question that comes to mind is will anyone need purchase a computer for his home in a few years? Dell, HP, Compaq and the like should be trembling. Flash-compatible TVs probably aren’t going to replace business computers, of course, but computer manufacturers could stand to lose a significant amount of market share to companies they didn’t consider competitors just a few years ago. 

In the meantime, Apple is down on Flash for the iPhone, saying it uses too much battery power and too much computing power. That may be true, but Flash, which is free, has a penetration rate well above 90%. I think it’s also true that ultimately very few people are going to be interested in watching Lawrence of Arabia on a screen the size of a credit card. As a result, Adobe will be tough to unhorse as we lurch towards convergence.

Read the full NYT report here.