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  • Creative Technology Excels in PC DVD-ROM Market
  • December 29, 1998 (SINGAPORE) -- Creative Technology Ltd. and its chairman Sim Wong Hoo have emerged as among Singapore's most admired corporate groups and executives, as the company has pioneered a new industry in the face of the regional economic slump.
    Creative Technology produces multimedia peripheral equipment.

    In 1998, the company set the pace for the DVD-ROM market by defining the price and performance of the devices. Also, it re-entered the graphics card market with new products and delivered its new audio card in Sound Blaster Live!

    In addition, chairman Sim was honored as Businessman of the Year in Singapore for "masterminding and executing a spectacular corporate turnaround" after its losses in 1996.

    The government recently appointed Sim to head one of two working committees under the Technoprenuership (technology entreprenuership) 21 Ministerial Committee.

    Creative's net income for the fiscal year ended June 1998 reached a record high of US$184.9 million, for a year-on-year increase of 15.4 percent.

    The company reported net income of US$21.5 million for the quarter ended September 1998, compared with US$51.6 million for the same period a year ago.

    Analysts said that the company overcame difficult economic conditions in several of its major markets.

    One of its strengths is its lead in the PC DVD-ROM market, the analysts said. After launching its first-generation DVD-ROM drive in March 1997, priced at around US$400, the company followed in October 1998 with its second-generation PC DVD Encore 5X, carrying a retail price of US$199.

    The company, which also sees the market moving toward PC DVD-RAM technology, recently launched a DVD-RAM kit for US$499.

    "Creative continues to price DVD products at close to break-even in order to preempt competition, stimulate demand and generate opportunities to sell high margin audio products by bundling them with DVDs," said Lucas Ward, an analyst at Goldman Sachs.

    "Creative is focused on making its PC-DVD technology more affordable," Sim said.

    DVD is becoming more popular because Creative has pushed prices below US$200 and the company hopes a sell more than 100,000 units a month, Sim also said.

    Also, the company announced at the COMDEX/Fall '98 show in November that it will enter the graphics market again, despite its earlier failure and a string of losses.

    The company said that it expects to generate about 15 percent-20 percent of its sales in the current quarter from graphics cards and that it will stress sales of cards to OEMs. It arranged collaboration with U.S. PC maker Gateway Inc., for supplying graphics solutions.

    "Creative seems to be aiming very squarely at the high-end," Ward said. He added that it has unveiled offerings like 3B Blaster Banshee, Voodoo2 and PCI products.

    The Singapore government has invited Sim to help bolster the nation's entrepreneurial drive.

    "For the private-sector committee, we wanted a chairman who is a visible symbol and who has built a successful entrepreneurial company, and Sim has done that," Deputy Prime Minister Tony Tan said.

    Tan made the comment when announcing Sim as head of part of Singapore's "technoprenuership" drive.

    Sim is expected to work closely with the National Science & Technology Board to assist the government in realizing its vision.

    (Joseph Rajendran, Asia BizTech Correspondent)

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    Updated: Mon Dec 28 13:18:58 1998 PDT