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

To: LR who wrote (11311)	5/16/1998 5:03:00 PM
From: Savoirman	Read Replies (4) \| Respond to of 13925

I think Creaf has hit bottom. The crucial question with Creaf is whether the company has a long-term strategy. This was asked at the last CC but was inadequately answered, in my opinion. We all know that software and CPU-based solutions will eventually perform more of the functions now done by add-on cards. This is when CPUs become powerful and cheap enough and additional circuitry can be embedded cheaply enough into the processor. This is probably going to start becoming an issue in 1.5 year's time. The question is whether Creaf can transform its entire business model to still maintain growth in this new environment. I think it will. Creaf has many attributes which point to continued adaptability and profitability. Financial strength, strong brandname, good diversification capabilities and strong core R&D capabilities. Management is very strong indeed - the turnaround engineered by Sim must truly be one of the most amazing in US/Singapore tech-sector corporate history. These are attributes that prevail even when the products change. The problem is many investors think of Creaf as a "soundcard" company. Or an "add-on" card company. I think Creaf is a multimedia solutions company. It will provide solutions fit for the times. At the moment the add-on card is still the most economical choice given the level of performance required. No way a CPU or embedded solution can give you Voodoo2-type performance at US$300. Same for SoundBlaster Live! By raising the standards expected of the multimedia experience, Creaf lengthens the life of the add-on card. Meanwhile, I am sure the company is working on its business model for life after the add-on card. This, I expect, will be software/intellectual property-centred with sales of peripherals like speakers, visors, joysticks, display panels, webcams etc becoming very important. I think Creaf will eventually become an appliance company selling multimedia appliances the same way vacuum cleaners and blenders are sold today. Just my $0.02's worth.