Creative Technology

[millionairemind]

For the no. of years it has been in a loss, I am surprised it is still holding above $4..

January 22, 2009, 12.29 pm (Singapore time)

Creative stays in red for Q209, posts biggest loss in 11 quarters

By ANGELA TAN

SINGAPORE - Creative Technology Ltd, posted its biggest loss in 11 quarters as second-quarter sales plunged amid the global recession.

The net loss was US$32.4 million, or 44 US cents per share, in the three months ended Dec 31, compared with net income of US$7.6 million, or 9 US cents, a year earlier.

Sales tumbled 41 per cent to US$155.7 million.

Creative, which also makes accessories for the iPod, slashed its inventory to US$57.3 million, 45 per cent lower than the previous three months.

Craig McHugh, president and COO of Creative. said: 'Looking forward, we expect that the difficult market environment will continue to deterioriate. We are evaluating the structure of our field organisations so we can significantly reduce our operating expenses.'

[kennynah]

this company....i will never buy into....imo, and it is no rumour mongering nor factual....

it is fading into oblivion...just look at the products they offer in the market... rubbish.... cannot compete, expensive... almost brandless now....

it seems to me...the CEO and owner...is not interested any more...

[financecaptain]

this company....i will never buy into....imo, and it is no rumour mongering nor factual....

it is fading into oblivion...just look at the products they offer in the market... rubbish.... cannot compete, expensive... almost brandless now....

it seems to me...the CEO and owner...is not interested any more...

Company is suffering because it has no core business at the monent.
Looking at history, after sound card, Company has no winner product.
Company tried to venture into many new product lines in the past but failed miserably. Confidence is probably highly shattered. Althiough it probably has cash now to acquire new businesses.
Creative's weakness seems to be in execution. Its CD Rom venture was marred by inventory issue. Its dot com ventures during the boom also ended in misery. Finally, the Zen venture was a great idea but failed misery in execution.
Maybe biggest weakness of Company is it is too top down. Relying too much upon its few senior executives to run the whole company.
As the Company name suggest, it seeks to be "creative". It is not a manufacturing company seeking great efffciency like the army. If you want to be a creative company like Nike, Google etc.. then your creative juices should flow throughout the organisation. Not just top down .. to expect a water fall. It is just not going to happen.

[iam802]

Creative has not been able to shed its 'manufacturer' mindset.

I am just speaking based on what I feel and do not have facts to substantiate.

They have a stronghold on soundcards and is at one time holds the largest market share for MP3 players.

The missing link is their ability to tie all these together. They are still trying to sell more gadgets (a manufacturer mindset) but is missing the greater picture of addressing how consumers are taking on the digital content.

And, unfortunately, this is where they lose the edge.

It does not take a lot for one to take note that Apple is moving towards increasing their revenues from transactions. (purchase of services, digital content etc).

Creative needs not be Apple. But, the question will remain. What does Creative stands for?

Perhaps, govt. expectations of keeping jobs is tying them down? Restructuring is a painful process and more so, for a company that requires brain power.

[financecaptain]

Perhaps, govt. expectations of keeping jobs is tying them down? Restructuring is a painful process and more so, for a company that requires brain power.

I understand that Creative has been shedding jobs. Mybe quietly.
You are right that they are still in a "manufacturing company" mindset. Very top down and product centric.

[millionairemind]

Creative Technology
Jan 28 close: $4.13
DBS Vickers, Jan 23

DETERIORATING consumer demand eats into earnings: Sales from all major product categories declined in the quarter - MP3 related business declined 43 per cent, audio/SoundBlaster segment declined 41 per cent and speaker sales were down 48 per cent. With 45 per cent q-o-q reduction in inventory position, gross margins sank about 8 percentage points q-o-q to 15.5 per cent.

No exciting product launches; outlook grim: As highlighted in our last report, the demand outlook for consumer electronics remains challenging and is compounded by the fact that Creative continues to lose market share in established market segments like MP3 players. Though Creative recently announced the launch of the Zii Platform using StemCell Computing, benefits are unlikely to flow in the near term.

Wider loss expectations, downgrade to 'sell': We widen our FY09 net loss projection to US$106 million from US$46 million previously and also project larger losses of US$84 million in FY10. Stock price has held up well since our last sector report where we highlighted Creative as a privatisation candidate (trading below cash) and hence, we downgrade the counter to 'sell' now as we expect net cash per share at end-FY10 to fall to around $2.50.
SELL

[winston]

Is the global economic downturn really the cause ? If you ask me, it's poor marketing. How come I-Pod is doing so well compare to the Zen ?

=========================================================================

CREATIVE TECHNOLOGY LTD. - Creative Technology reported on Tuesday a net loss of $41.8 million for its third quarter ended March 31, compared to a $3 million profit made last year, citing the effect of the global economic downturn on demand for its products.

[Poles]

ask any kid, who is more cool?? steve or sim?

[iam802]

Creative Zii EGG

http://www.hardwarezone.com/articles/vi ... 11&id=2971

===
My thoughts:

1. It looks to me, the key thing that Creative is trying to license here is the chip and some other parts. To be the middle-man to other manufacturers, maybe? Eg. I supply you with everything you need to build a fantastic 'next generation' product. Or a case of they want to focus more on the manufacturing portion, rather than at the retail level.

3. But, surely there will be other suppliers for such chips. Eg. TI, Qualcomm, and a whole slew of others that is focused within this sector. So, the remaining differentiating layer will be the 'OS' or whatever software layer that they are building and providing.

4. This new product, also runs on Google's Android. A departure from the usual MSFT platform and also some kind of customized Linux kernel.

5. Perhaps, Creative has wised up and know that it is better to chart their own destiny rather than to rely on MSFT.

[kennynah]

i think he should sell his business away....take the 100s of million and go fishing....

the man macam lost his passion liao.... drifting along... as if he just wants an office to keep himself occupied...keep his sanity... national day speeches no longer speak about him...the fallen star...