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

To: Jeff Lins who wrote (12125)	8/26/1998 8:41:00 PM
From: Brian Lempel	Read Replies (1) \| Respond to of 13925

There are really 2 answers to your question: 1. SB Live price will be lowered to probably $129 for a stripped down version that will compete more directly with Vortex2. Given the choice, I would suspect that most will still go with Live given the backwards compatability, excellent exposure, and rave reviews. 2. CREAF will also have a Banshee board. You have to figure that the DIMD combo will be very stripped down, with poor software bundles (unless they are purposely trying to drive themselves out of business as ChingLee suggested on the Yahoo board). Gamers definitely go for the software, even at a higher pricee. This is why CREAF has done poorly, relative to DIMD, with retail Voodoo II. Even though I feel that the CREAF bundle was more impressive, and included more full title, DIMD did a good job of hyping their bundle, and making it appear that they offered the better deal. I don't think this will be the case for the $199 combo. DIMD is really hurting. Graphics margins are in the dirt. To even be competitive with SB Live, they have to destroy audio margins as well. They are also operating on risky ground by offering as their marquee product the vortex2, which may very well be pulled off the market. Brian

To: Jeff Lins who wrote (12125)	8/26/1998 9:07:00 PM
From: Savoirman	Read Replies (1) \| Respond to of 13925

By the time the Diamond products ship in October Creative will be ready to drop prices and offer upgraded versions of SB Live (with perhaps more hardware streams and AC-3). Anyway, SB Live is selling for about $160 at some of the on-line sites I see. The margins on this thing are HUGE basically because Creative's been working on this for two years, and as a matter of policy they expense immediately all R&D costs. So all it costs to make the card now is just manufacturing. I estimate gross margins around 70%-80% meaning halving the price will still give 20-30%.