Creative moves to get on the motherboard...........................
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Creative Buys Ensoniq to Get on the Motherboard; Gains Design Wins with Low-cost PCI Audio
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Creative Technology Ltd.'s [CREAF] acquisition of Ensoniq Corp. for $77 million will give the company access to a growing number of OEM accounts via a low-cost PCI technology that puts audio on the motherboard. And it could provide one of the missing pieces the company needs to build a single-board multimedia architecture for the sub-$1,000 market. (see MMW, Dec. 3)
The merger is bad news for companies in the PC audio business who have to compete with Creative's widening reach, which now includes audio products for the motherboard, add-in cards, speakers and professional markets. Creative's entry into the speaker business solidified last week with the purchase of 95 percent of Cambridge SoundWorks [HIFI].
Ensoniq also gives Creative access to some high-end musical keyboard technology, which will create some manufacturing and design synergies with E-mu Systems Inc., yet another Creative subsidiary.
The major motivations behind the Ensoniq acquisition were the Malvern, Penn.-manufacturer's key OEM design wins and low-cost PCI audio technology, known as AudioPCI. (see MMW, March 3, p.1).
"Ensoniq has taken away the entire Gateway account from them," said Lenny Brecken, an executive director with CIBC Oppenheimer Corp. "This acquisition bar none was a defensive move because Ensoniq was an immediate threat."
Volume on Tap
With the advent of MMX technology, Ensoniq was able to develop a PCI audio technology that relied on the instruction set rather than a DSP, pushing down the price of its products, Brecken said. Look for Creative to pitch that audio technology as the de facto standard on sub-$1,000 PCs. As an added bonus, Ensoniq's AudioPCI makes audio products backward compatible with DOS titles.
In addition to Gateway 2000 Inc.., [GATE], Ensoniq has design wins with Hewlett-Packard Corp.[HWP] and is expected to announce an OEM deal with Packard Bell NEC Inc. that includes consumer PCs sold in Europe, Multimedia Week has learned.
Ensoniq, a 200-person peripheral maker that has focused on the OEM markets, gains a stronger marketing and distribution arm, which can only enhance its reach.
Ensoniq has shipped 1.5 million AudioPCI boards since February and expects big things from its motherboard business next year, said John Spataro, Ensoniq's director of marketing.
"It's what Intel always wanted to do with native signal processing but was never able to get quite right," Spataro said. (Creative Labs, 408/428-6600; Ensoniq, 610-647-3930; see MMW, Oct. 27,; Nov. 10 and Nov. 17 for related stories.) |
