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Technology Stocks : Creative Labs (CREAF)

CREAF 0.448

-12.1%

Dec 17 12:59 PM EST

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To: burn2learn who wrote (13289)	1/11/1999 4:16:00 AM
From: Derrick Lim Kok Fang	Read Replies (1) of 13925

Hi, I spoke to Sim during the AGM. Creaf coporate vision is that the company will be focusing on PC related entertainment. The definition is quite nebulous as the traditional consumer electronics starts to converge with PC related technology. Creaf is I believe will be position to tap into that convergent. As regard to 3Dfx merger with STB: His thoughts was that it will be incredible for a chip company to manage a board company as there are many issues to pursue like inventories, resellors etc. OEM deal: Creaf has not been pursuing OEM strategy aggressively as it generally generate less profit. He said that Creaf revenue can be easily boosted up by just selling lots of CDROM drives. The company instead chooses not to do so in spite of strong market demands. They are selling a lot of DVD now and the demand is exceeding supply. DVD will be good for Creaf but the profits will come from the peripherals bundled with DVD drives instead. As for other OEM pursuit, the company is focusing on OEM deals without eroding much margins. Their strategy is to enable boxmaker's customer a range of higher margin Creaf options. This he said will appeal to boxmaker as it helps them to raise their average selling price as PC is now a commodity item. This OEM strategy is I think much more desirable instead of pursuing the likes of ATI which sell cheap and make tiny profits. I will not like Creaf to be at the mercy of boxmaker and be relegated as an OEM supplier. Now in the PC board market, which company has been consistently generating profits quarter afer quarter-----Creaf. Diamond, 3Dfx, STB, or whatever: they have good brand names but they don't make profits. Regards Derrick

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