Adobe, whose main products used to be distributed in shrink-wrapped packages, is now an online subscriber-based company. This week, the company said that subscriptions for its Creative Cloud exceeded one million at the end of its third quarter, signaling a milestone in the company’s effort to rebuild its client base under this new model.

The good news for Adobe is that its subscriber base is growing faster than expected, as analysts had been predicting the total would not hit one million until fourth quarter. The less-good news is that the Creative Cloud subscription pricing model means more deferred revenue for the company, as users pay smaller monthly fees for access instead of a single larger fee to buy an entire software package.

Adobe Dips into Hardware with Mighty and Napoleon

The company's net income dropped in the third quarter to US$ 83 million or 16 cents per share, compared with US$ 201.4 million or 40 cents for the same quarter last year. Revenue for the quarter declined to US$ 995.1 million from US$ 1.08 billion, year-over-year.

Rebuilding the customer base into a subscription model is not Adobe's only new direction. This week, it announced that two experimental projects in the new direction of hardware -- the cloud-based pen Project Mighty and a digital ruler called Project Napoleon -- were moving from R&D projects into product development. Mighty and Napoleon -- which together sound like pair of cartoon heroes -- are being developed in conjunction with stylus-maker Adonit, and are expected to ship in the first half of next year, Adobe said.

Mighty and Napoleon.png

Adobe's Mighty is the tall thin one, and Napoleon, of course, is the short ruler.

Learning Opportunities

The Mighty “cloud pen” is intended for use with the iPad. Although it can function as a normal stylus, the Bluetooth LE-enabled device shows its uniqueness when employed with Adobe software that allows its use with Creative Cloud applications. The pen features a twister aluminum shell for ease-of-handling, an LED that signals battery status, data transfer and other states, and a USB charging cable. The diminutive ruler, bearing the inspired name of Napoleon, works via Bluetooth LE with the pen to assist in drawing shapes and other visual tasks.

Projects Parallel and Contour

In a posting on its Creative Layer blog, Adobe Experience Design team leader Michael Gough wrote that the company is attempting to make “digital creativity both more accessible and more natural by combining the accuracy, expressiveness and immediacy of pen and paper with all of the advantages of our digital products and the Creative Cloud.”

Gough gave a couple of indications of one of Adobe’s next rounds of reinvention. He announced sneak peeks of two new apps -- a drafting iPad app called Project Parallel that was built specifically for Napoleon, and Project Contour, which allows a user to photograph an object or a shape and then access those captured shapes for architectural drawing via Napoleon on the iPad.