Creative Technology
 | |
| Company type | Public SGX: C76 , Nasdaq: CREAF |
|---|---|
| Founded | July 1 1981 |
| Headquarters | Singapore |
Key people | Sim Wong Hoo, Founder & CEO |
| Products | Multimedia, IT, MP3 players |
| Revenue | US$1.12 billion (2006) |
 US$(82) million (Q2 FY 2007) | |
Number of employees | 5000 |
| Website | www.creative.com |
Creative Technology Limited (SGX: C76 , Nasdaq: CREAF) is a listed manufacturer of computer multimedia products based in Singapore, where it was founded by Sim Wong Hoo on July 1, 1981. The firm employs more than 5,000 people worldwide. Sim is the CEO and chairman of the company. The company's U.S. subsidiary is known as Creative Labs, Inc., a name commonly but incorrectly used to refer to the entire company.
Historically, Creative was most famous for their Sound Blaster line of audio cards. Now they are known for their line of portable multimedia players.
History
Creative began as a computer repair shop, where Sim developed an add-on memory board for the Apple II computer. Later, they started creating customized PCs adapted for the Chinese language. A part of this design included enhanced audio capabilities, so that the device could produce speech and melodies. The success of this audio interface led to the development of a stand-alone sound card.
In 1987 Creative released a 12-voice sound generator sound card for the IBM PC architecture, the Creative Music System (C/MS), featuring two Philips SAA 1099 chips. Sim personally went from Singapore to Silicon Valley and managed to get RadioShack's Tandy division to market this card. The card was however not successful and lost the competition against the AdLib card which was using the Yamaha YM3812 chip (also known as OPL2). In addition to being a capable gaming card, the AdLib version was also a passable music synthesizer, which was a task the C/MS could not do.
Later, another attempt was made with the Sound Blaster, a card featuring the same chip as found on the AdLib card and with additional digital audio capabilities for playing and recording digital samples. Creative used aggressive marketing, like calling the card a "stereo" component even though only the previous C/MS card offered stereo, or calling the sound producing microcontroller a "DSP", hoping to associate the product with a digital signal processor. This card soon became a de facto standard for sound cards in PCs for many years, mostly by the fact that it was the first to bundle what today is considered as part of sound card functionality: digital audio, onboard music synthesizer, MIDI interface and a joystick port.
Present day
Creative's most lucrative products are the Creative NOMAD/Creative Zen digital audio players, which is in the same market as the iPod and other portable music players. The Sound Blaster line still exists with products such as Sound Blaster Audigy, Sound Blaster Audigy 2 (the first sound card to be THX certified), Sound Blaster Audigy 4, and Sound Blaster X-Fi. The sound card market continues to be a solid performer for Creative; despite steady improvements to the sound controllers built into most PC motherboards, the capabilities of third-party cards tend to exceed onboard sound hardware. Currently, Creative's flagship Soundblaster product is the X-Fi Elite Pro.
The modern Creative Technology has diversified considerably; Their products include MP3 players, speaker systems, webcams, video cards, networking components, mobile wireless headphones [1] [2] and a Liquid crystal display (LCD).
As a corporation, Creative has recently met with some stiff competition. In July 2005, Creative Technology's shares plunged to a new all-time low of $6.25 per share [3] as a result of poor sales in the 4th quarter of 2004 / 1st quarter of 2005 despite a US$100 million campaign to take on Apple Computer and the highly-successful iPod range. This represents a significant change from the $50 their shares commanded in 1998. In August 2005, it was announced that Creative's losses for that quarter amounted to US$31.9 million, going into the red for the first time in three years. Q3 FY2006 losses were US$114.3 million[4]. In June 2006, their stock price was $5.22 per share (up from a low of $4.64).
In May 2006, Creative sued media player rival Apple Computer, alleging patent infringement [5]. Apple quickly filed a countersuit [6], following the suit again in early June with a second countersuit [7].
On August 23rd, 2006, Apple and Creative settled all their patent lawsuits out of court; with Apple paying Creative $100 million to licence a software patent, and Creative signing up to Apple's Made For iPod program. [8]
Total revenues for the second quarter of fiscal year 2007, ended December 31, 2006, were $424.4 million, which include the above $100 million paid-up license from Apple for use of the Creative Zen patent in its products. Revenues that came from sales of products totaled $324.4 million during the quarter. With the strong sales of its flash-based Zen players, the company achieved its goals of bringing gross margins above 20% and returning to profitability.[9]
In the 2006 holiday quarter, Creative sold 2.5 million MP3 players during the period (for comparison purposes, Apple shipped about 21.066 million iPod devices onto the market during the same period). In the first half of 2006, Creative commanded about 3.7% of the digital media players market, according to NPD market research agency.[9]
High-end audio cards, once the mainstay product for which Creative Labs became known for in the nineties – now account for only about 10% of the company’s sales. It is estimated based on the 4th quarter 2006 sales figures, that less than 1% of 57.15 million PCs sold per quarter include a discrete audio card by Creative Labs. However, according to a recent poll, a significant number of advanced users still prefer SoundBlaster over competing options - about 14% of the gamers polled opted for an audio card by Creative Technology.[9]
Products
Creative is best-known for:
- High-end Sound cards such as the Sound Blaster for the PC
- Speakers
- Gaming sound systems
- CD-ROM and DVD players and controller cards
- Graphics cards
- Web cameras
- Digital audio players (MP3 players) under the name of Zen and MuVo.
- Prodikeys, a computer keyboard-musical keyboard combination
- Optical Mice and Keyboards
- [HansVision Bi-lingual Comprehensive Software]
See also
References
- ^ "Review on CNET for Creative's wireless headphone".
- ^ "Review on BBC for Creative's wireless headphone".
- ^ http://fyad.org/bdt9
- ^ "Creative Announces Q3 FY06 Financial Results".
- ^ Welte, Jim (2006-05-16). "Creative sues Apple over patent". mp3.com.
- ^ Welte, Jim (2006-05-19). "Apple bites back at Creative". mp3.com.
- ^ Welte, Jim (2006-06-07). "Apple sues Creative again". mp3.com.
- ^ BBC News on Creative settlement with Apple
- ^ a b c Shilov, Anton (2007-02-08). "Creative's SoundBlaster May Account for Less than 1% of the PC Audio Market". xbitlabs.com.
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