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

To: Dennis G. who wrote (13538)	2/11/1999 4:24:00 AM
From: Gambit	Read Replies (2) \| Respond to of 13925

Is Creative getting into the motherboard market? ------------------------------------------------- This ones going to make CREAF rich.... Ha ha ------------------------------------------------- Creative Technology Ltd., the largest manufacturer of add-on cards for the PC, may be following rival Diamond Multimedia Inc. into the motherboard market. Creative's U.S. subsidiary, Creative Labs Inc., is advertising for a "motherboard brand manager" to manage the "profit and loss of motherboard stand-alone and motherboard kit business for the Americas," according to a job description posted on the web site of Creative Labs, Milpitas, Calif. The job involves developing a product roadmap and pricing strategy. A spokesman for the company said a motherboard product was "one of these things we're looking into," but that he didn't expect a motherboard division would represent a very significant part of Creative's revenue even if a motherboard division was formed. During its conference call with analysts just over a week ago, Creative Technology Ltd. chairman and chief executive Sim Wong Hoo did not mention specific plans to enter the motherboard business, but only that Creative's audio chips were expected to begin appearing on motherboards using the Intel 820 or "Camino" chipset. Creative reported a net income of $60.6 million on sales of $428.7 million for its second quarter of the 1999 fiscal year. In July 1998, competitor Diamond Multimedia, San Jose, bought motherboard maker Micronics Computers Inc. Both Creative and Diamond already produce several competing product lines including audio, modem, and graphics cards, and are considered rivals. "[Creative] tends to follow us a lot, for whatever reason," a company spokeswoman for Diamond said. The ad has stoked the nationalistic fires of Taiwanese motherboard makers, who produce about 80% of the world's supply. "Creative won't be a big threat to [Taiwanese] motherboard makers," said a spokesman for a Taipei-based motherboard maker. "Taiwan has the infrastructure...It is very difficult for a newcomer to compete with [Taiwanese] makers who have such resources and experience." Save for Intel and some OEMs, motherboard makers traditionally purchase PC core logic from a third party, then perform the increasingly delicate task of making sure the chipsets work reliably with different configurations of chips and upgrade slots. Other things being equal, however, OEMs will select the cheapest motherboard available. Competing vendors contend that they would have an advantage in designing reliable boards, but that Creative's own chip expertise poses a problem. Because of Creative's history of designing the SoundBlaster PC audio specification and associated chips, competitors fear that Creative could mount its audio chips upon the motherboard, providing an attractive, higher-margin audio/core logic bundle for PC OEMs. Two motherboard manufacturers declined to comment publicly because of fears that their relationship with Creative as a supplier would be in jeopardy. If Creative does enter the market, competitors predicted Creative's lack of motherboard expertise would cause the company to design its first products based upon tried-and-true chipsets, such as the established 440BX from Intel Corp. used in today's newest PCs. Source: Electronic Buyers' News Adam-