Doug, I beg to differ -
People have been predicting the demise of Creative since 93, but the company has survived. Let's look at your reasons:
1. Continued decline of PC prices, with cheaper components and more stuff built into the motherboard. & 2. Inability to adapt to the lower-priced PCs.
The decline of PC prices did not happen because people just suddenly decided to spend less on PCs. It happened because software development was slow, CPUs were too powerful for most applications (and too weak for others, like sound), DRAM oversupply, hard drive oversupply, the Asian crisis, inventory destocking and market share grabbing by PC makers (who suddenly discovered the value PC phenomenon). This means people are buying what they need, thus saving money, which they can spend on other things, like really good sound and graphics.
3. People don't expect their PCs to be stereos or high fidelity systems. Basic
sound is sufficient for 90 percent of the populace. And basic sound will
continue to get marginally better.
On the contrary, I believe supply creates demand. If there is high fidelity sound to be had, people will want it. I mean, why do people want 17" monitors when 15" is enough, why do people want colour when you can have B&W, why do people want stereo when you have mono, why do you want sound when you have text, why do you want 3D when you have 2D?
4. Creative isn't innovative. It doesn't know how to adapt. Or it doesn't want
to adapt. For it to be successful, it needs to work more on the software side,
and less on the hardware side. It needs to think like RNWK. But then, Creative
doesn't understand the Internet. Probably still thinks it is a big fad.
Have you been to Creative Inspire, of the corporate website, or the news server. Creative has created a Chinese Internet Translator which is recommended by Singapore's Ministry of Education to be used in all schools in Singapore. The software has also been pirated in Singapore, the ultimate accolade for any home-made code. I think Creative is very serious about the Internet indeed.
5. The Creative brand name means less and less. A few years ago, the
Creative name was well known and meant something. Nobody even cares
about SoundBlaster any more.
Gee, about 20 websites are covering SB Live like some main event. "SoundBlaster" is still on the cover of almost every game software in the stores.
6. The consumer 3D market is saturated (witness the woes of TDFX). Sure,
this will play a role in the future, and will come from Intel most likely. The
key here, though, is that Creative is doing nothing innovative in 3D. They
simply OEM the technology from someone else. And as Intel gains dominance,
they won't even have an OEM market.
Graphics is a small business for Creative.They do it to complete their multimedia line. Intel has all sorts of ambitions to become the one and only chipmaker on earth. However, I believe Intel is a company in decline. Not because it does not have the requisite technology, but because PC makers, chipmakers, consumers and other hardware makers fear it will become too powerful. Already, AMD has bitten off a chunk of market share. Compaq and others have proposed their own motherboard bus. I think Intel is going to lose more and more control of the PC world. People will increasingly design away from Intel and give more business to its competitors. Same for Microsoft.
7. Creative won't own the DVD market either. Maybe they are doing OK now in
a relatively niche market, but I can't see that lasting.
Creative is about the only established player in PC-DVD, thus their 80% market share at retail. Like everything else, new players will come in and margins will shrink. So what's new?
8. Creative has always meant sound. For Creative, it has always meant
hardware. But sound will be much more about software and communications
and the Internet in the future. Creative is not adapting. They are not
innovating. They just want to be a hardware company. A commodity hardware
company. They aren't going away. They're just becoming irrelevant.
I think Creative has many more cards to play. They have bought SEI, and I see more coming. Everybody can see that Intel just wants to promote Camino so that they (Intel) will not become irrelevant. Tom (of Tom's Hardware) points out that the purpose of Camino is simply to take functions done just fine on relatively cheap add-ons, and move them to the very much more expensive CPU, just so users will have to buy the next more powerful Intel chip. I think the market (you and me) will not be fooled. Camino will bomb, just like the PII-450 etc. Humans have inherent limitations - we can only read so fast, think so fast, watch so fast, discern so finely. Unless big bulky CPU-cycle-gobbling software become enormously useful, the PII-333 is all 99% of the population needs. |
