5/26/98 - Creative Takes On Intel With Silicon Engineering Acquisition
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MILPITAS, CALIFORNIA, U.S.A., 1998 MAY 26 (Newsbytes) -- By Patrick McKenna, Newsbytes. With Intel [NASDAQ:INTC] determined to fold graphics, audio and other multimedia capabilities into microprocessors and motherboards, traditional audio and graphics leaders such as Creative Technology [NASDAQ:[CREAF]] are being challenged to meet a new computing platform of integrated multimedia functions. In response, Creative announced the acquisition of silicon and systems designer, Silicon Engineering, Inc. of Scotts Valley, California.
The systems designer opens wide doors of opportunity for Creative. Founded in 1987 by Rich Hansen, Martin Randall, and Owen Sharp, both former managers at Intel, Silicon Engineering has developed a customer list which reads like the Who"s Who in the computer industry. Microsoft, Adaptec, IBM, Apple, Adobe, Amdahl, AT&T Microelectronics, Cirrus Logic, Fujitsu, Hitachi, Lucent, Chips & Technologies, and more have used Silicon Engineering"s services.
A spokesperson for the company said, "We have systems expertise in the fields of 2D and 3D graphics, video, audio, communications and connectivity, specialty memories, and embedded systems. We have a significant and growing patent portfolio in these and other areas." Currently, Silicon Engineering holds 17 patents.
Creative reportedly paid $22.5 million in stock for the 11-year old company.
The price is seen as a bargain for Creative. Immediately, the deal is seen as a benefit to Creative"s long-term plans to advance computer users" multimedia experiences through more advanced chip designs and circuit board enhancements.
According to most industry observers, the trend to move features into silicon design will result in better performance at lower prices.
In addition, the acquisition also brings Creative into a new business which branches widely into many phases of the computer industry. Memory design, communications improvements, networking advances, and display technology are part of the overall package Silicon Engineering brings to Creative.
Financially, the deal is more than suitable to Creative"s cash position. Stephen Chan, analyst with Kay Hian Pte. Ltd. of Singapore, said Creative"s expenditure of $22.5 million is 1% of the company"s enlarged share capital. Current reserves are estimated to be in the area of $375 million.
Creative"s acquisition news comes a week after speculation surfaced around Intel possibly heading for an antitrust action from the Federal Trade Commission (FTC). Specifically, sources close to the case said the government was concerned about Intel"s integration of audio and graphics capabilities into Pentium II architecture.
Intel appeared undisturbed by the rumors, saying the company has been working closely with the FTC investigation which has been publicly acknowledged since September of last year.
In the meantime, Creative is aggressively moving forward with an audio technology the company calls its Environmental Audio Platform. The process allows developers to enhance positioning audio with modeling environments in real time that include special effects such as reverb, echo, occlusion, room size, underwater effects and more. The result claims Creative is a realistic experience that "encompasses the user" instead of surrounding the user.
Paul Provenzano, vice president of production and development at Fox Interactive, endorsed the technology saying, "They have made it so easy that our developers are already working with Creative"s Environmental Audio Extensions to DirectSound 3D. This is allowing our game designers to create the best interactive 3D audio environments for our games."
Creative is expected to continue an aggressive and expansive mode. Last year the company added speakers maker Cambridge Soundworks, low-end chip provider Ensoniq and design house Opti to the Creative stable. With money in the bank and Intel quickly seeking a dominant multimedia systems market position, Creative is determined to stay in the race.
Reported by Newsbytes News Network: newsbytes.com. (19980526/Press Contact: Theresa Pulido, Creative Labs, tel 408-428- 2329/WIRES PC, BUSINESS/CREATIVE/PHOTO)
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BUSINESS, HIGHTECH, INFOTECH, PUBLIC+COMPANIES, WALL+STREET, ANTITRUST, ARCHITECTURE, BUSINESS, COMPUTER, ENGINEERING, GOVERNMENT, INVESTIGATION, MARKET, MONEY, NASDAQ, NBY, NEWS, NEWSGRID, PATENT, PRICES, SINGAPORE, TECHNOLOGY, TRADE, VIDEO, INTEL, INTC, CREATIVE+TECHNOLOGY+LTD, [CREAF], CAMBRIDGE+SOUNDWORKS+INC, HIFI, MAY 26, NEWSBYTES, PATRICK MCKENNA NEWSBYTES, INTC, [CREAF], CREATIVE, SILICON ENGINEERING INC, SCOTTS VALLEY CALIFORNIA, FOUNDED, RICH HANSEN MARTIN RANDALL, OWEN SHARP, INTEL SILICON ENGINEERING, WHO S WHO, SILICON ENGINEERING, CURRENTLY SILICON ENGINEERING, IMMEDIATELY, ACCORDING, MEMORY, FINANCIALLY, STEPHEN CHAN, KAY HIAN PTE
{SYMBOL}
INTC, [CREAF], HIFI
(Load Date: 5/26/98)
Database: Comtex Business News
Keyword(s): ( [CREAF] )
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