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Technology Stocks : Creative Labs (CREAF) -- Ignore unavailable to you. Want to Upgrade?

To: Fred Fahmy who wrote (11162)	5/2/1998 9:52:00 AM
From: HEXonX	Respond to of 13925

Fred, your are a very level headed individual and I think we should all listen to what you have to say, especially that the fiscal year ends June 30th 1998 for CREAF. Good Luck to all, HEX

To: Fred Fahmy who wrote (11162)	5/2/1998 3:32:00 PM
From: LR	Respond to of 13925

Ditto FF. EOM

To: Fred Fahmy who wrote (11162)	5/3/1998 4:38:00 AM
From: Doug Fowler	Read Replies (2) \| Respond to of 13925

Fred: Thank you for taking the time to give well-thought out answers, as you always do. With regard to DVD: it has the POTENTIAL to be huge, but it has to solve several problems you touched on: 1. It has to be as convenient or more convenient than VHS tape for the consumer electronics market. People want to be able to record (albeit infrequently). Hollywood does not like this, because once DVD is recordable, it will be SO EASY to make copies. And I think Hollywood will continue to stand in the way. 2. Lots of content has to be available. The Catch-22 is that people won't buy DVD until the content is there, and the content producers won't bother until the demand is there. With regard to Creative playing in the Internet space: Sure, if the bandwidth were there, Creative could take advantage today. But we all know that the bandwidth won't be there for years. So, creative and smart companies learn to deal with the bandwidth as it exists now and for the next several years. Imagine what Creative could have done with their brand name recognition if they had used that to bring sound over the Internet ! WebBlaster. But instead, RealAudio dominates. Why? Because Creative only sees themselves as a hardware company. They could be in the software business, but they never will. They are just not creative (pun intended). This reminds me of a company I interviewed with several years ago, Televideo. One day, a LONG time ago, Televideo was a very successful terminal maker. They now make PC monitors and cheap clone sound cards. I asked them why they didn't do such-and-such in software, spend some of the little money they had left and invest it in software, internet development, etc. The response was "We are a hardware company and we will always be a hardware company. We will never be a software company." They continue to be a hardware company that continues to lose money every quarter (many, many years running). They continue to try to do all the "macro" things like figure out a way to make their unimaginative hardware a little faster and a little cheaper to build. I am not saying Creative is as bad as Televideo, just similar in many ways.

To: Fred Fahmy who wrote (11162)	5/3/1998 11:21:00 AM
From: Flint	Read Replies (1) \| Respond to of 13925

Fred: Agree on all points just wondering about their internet strategy. I thought they had the idea of drawing the internet audio publishers onto their website an d using it much like a broadcasting station ... is that considered as "taking advantage of the internet" ? In the end, what kind of business model can we propose which will make sense for Creative on the web ? Is it 1. Using it to sell existing product (Simple and already being done by their distributors right ?) 2. Using it to increase the use of audio (that's what their website is for right ? ... and to move internetters to the SB standard) 3. To use the advertising model .. i.e. use their website to earning ad dollars when people visit their site (does this really make any sense ?) I'm not sure... any ideas will help As for the delayed launch of SB Live... any ideas on whether this is a tactic to 1) make sure their existing inventory clears without the need to slash prices and accelerate the already short half-life of their product lines (Creative's new management team is watching this more carefully than before so I won't put it past them to be doing this... a positive for the company longer term) or 2) timing it behind MSFT's 98 release or 3) a bona fide screw-up which caused a delay either s/w or h/w ? Any thoughts ?