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The Business of Technology: Creative Labs
The Business of Technology: Creative Labs
Date: October 2nd, 2007
Topic: Business
Manufacturer: Creative Labs
Author: Ryan Smith
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Business and technology are forever linked together in one inseparable mass. Technology drives business: it drives new products, it drives improvements in efficiency, it drives companies out of business. Business drives technology: it drives what gets researched, it drives what gets invented, it drives the pace of technological progress. Each drives the other, the feedback from each further changing how one or the other progresses.

One only needs to look as far as the CPU industry to get an idea of just how this works. Intel has a strong business that keeps the company floating when one or more aspects of their technology portfolio are faltering, and having such wealth buys them technology advantages such as smaller processes sooner. Meanwhile AMD has a strong technology portfolio that keeps the company going even when business is bad, putting the company years ahead of Intel in in areas like the server market. Here the dynamic duo of HyperTransport and the Integrated Memory Controller have kept the company ahead of the Core2's onslaught over the past year (and will continue at least until Nehalem arrives).

It's because of the intertwined nature of business and technology that we sometimes have trouble conveying the whole situation when trying to talk about technology; some things can't make sense without an understanding of the business situation too. In recognition of that we are starting a new series "The Business of Technology," looking at companies and their technology from the side of business instead of the side of technology. From this perspective we can comment on things when it's not possible to do so from the technology side, and come to a better understanding on how for the companies we cover their business and technology situations are both driving their future.

Bear in mind that this is new ground for us, and how we go about things in the future will no doubt change with the times. We'd like to hear back from you, our readers, on how informative you find this approach, and how we can better deliver information from it. We'd like to bring everything to you in a well-rounded when possible.


The brand that started it all

With that out of the way, we're starting this series with Creative Technology Ltd, better known as Creative Labs. Creative has a long and rich history, the culmination of which was the creation of the SoundBlaster line of sound cards and the associated audio standard, which brought the full spectrum of synthesized and recorded audio to the PC. Although they have since expanded in to many other markets, Creative has and continues to be primarily a sound company, and was the king of sound cards... until recently.

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95 Comments - Last by 0roo0roo, 770 days ago
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Can't wait until the fat lady sings for Creative by calyth, 780 days ago
I thought Creative made some great soundcards, until I've suffered from an improperly grounded SB Live (then their flagship sound card). Their mounting bracket was not grounded properly, resulting in one dead SB Live card, one dead SCSI controller, and a non-functional PSU.

I found that the Aureal 3D support on the Hercules Fortissimo II gave a much better directional sound in EAX, and had it not been the lack of hardware mixing in Linux for the Hercules sound cards, I wouldn't have gone back to the Audigy 2.

To this day, their support for non-Windows OS is kinda spotty - they release their manuals in .chm, the only computing hardware manufacturer that I know that uses this format instead of PDF. Their flagship X-Fi has only recently got a lousy driver for Linux 64bit. Their MP3 players are nothing to write home about.

I personally can't wait until they're gone.

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RE: Can't wait until the fat lady sings for Creative by Missing Ghost, 780 days ago
I agreed. I really wish that Creative will die, we don't want them.

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RE: Can't wait until the fat lady sings for Creative by Jodiuh, 780 days ago
Die Creative. Die. And I've got an X-Fi. :D

Wo/ it, my GPU would be cooler tho.

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RE: Can't wait until the fat lady sings for Creative by sheh, 780 days ago
CHM documentation? That's the first good thing I hear about Creative in a while.

PDF = for printing.
CHM = for active reading or searching.

Try http://xchm.sourceforge.net/ (never used it, but I think it should do).



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RE: Can't wait until the fat lady sings for Creative by 0roo0roo, 770 days ago
yup, i'm glad ms sunk them. they've always been on the wrong side, i used to buy aureal cards which had better technology but sadly they went down. i refused to pay premium for a monopoly on gaming audio, and frankly i didn't really miss out. their technology has been stagnant while they milked gamers with high prices, well the gravy train is at an end. we have cores to spare for audio that can be improved without paying for a new card. win win.

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R and D says it all. by ricleo2, 780 days ago
Another great article here on Anandtech. This is one of the few articles here I fully understand. When I company in this shape starts spending more on R and D, look for a rebound. Otherwise look for bankruptcy or a buyout.

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Golden! by sc3252, 780 days ago
"Creative's problems are further compounded by Microsoft at #4, who is more than happy to lose money on the media player market for now" Golden! Microsoft seems to love losing money, as long as they have a chance next round.

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R.I.P. Aureal by trelin, 780 days ago
I've always kept a spot of sincere hatred for Creative for the way they sued Aureal into declaring bankruptcy, then purchasing the Aureal IP afterwards.

Aureal eventually won the lawsuit, but legal defense costs tied up funding for the AU8830. By the time it was done they simply did not have the funds to bulk produce the virtually completed chip/reference-card design and had to scrap the project.

I don't begrudge Creative for making an inferior product, but for their deplorable tactics I do hope they die and are forced sell their IP for a fraction of their development costs.

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RE: R.I.P. Aureal by takumsawsherman, 780 days ago
Yes, this was total manipulation of the legal system by Creative for illicit destruction of a competitor. Having always used Sound Blaster cards for add-in situations, I was skeptical when my distributor sales guy told me to try some Aureal Vortex 2 SuperQuads. But, seeing as the Creative equivalent was $100 at the time, and the Superquads were $50 retail, I figured I would give them a shot.

The sound quality was amazing, and while the drivers weren't perfect, this was the beginning of Creatives "horrible overstuffed driver" stage. $50 got the machine amazing 3D sound with A3D which Creative tried to "me too" with EAX. Except that A3D was really great, and EAX sounded like garbage. I was a convert, and was able to cheaply add great sound to the systems I was building.

Unfortunately, instead of rising to the challenge, Creative used it's tried and true "sue them into submission" strategy. Years later, I come across many SB cards with horrible crackling noises, pain in the butt driver installs, and my brain has me convinced that those old SuperQuads still sound better. Aureal was a fantastic company with fantastic technology, and Creative's big bankroll was the only thing that enabled them to drain Aureal's.

So, I totally agree with your last sentence, except I will add that I hope the Aureal people raise money to buy the IP and then make the moves that will revitalize the market.

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Creative's issues have been compounded by poor management by Reflex, 780 days ago
Having worked with Creative in a professional capacity at multiple times in my career I have a few observations of my own:

- Over the years Creative has refused to embrace new technolgies and trends. This includes PCI(had to buy Ensoniq to have a PCI product at all), PCI-E(offered poor excuses about latency to avoid having to release a new product), ACPI(poor driver and firmware support) and now UAA(Vista standard).

- Along those lines they have also refused to move into areas that are seemingly obvious for fear of cannibalizing their add-in board market. There is little reason that Realtek is ruling the on-board sound market, that could just have easily been Creative considering their background. Instead they chose to put on blinders and pretend that on-board audio could never compete with an add-in card. They may be correct in the absolute sense, but the average user does not give a damn. Back when it would have mattered, a Creative branded AC'97 solution with some enhanced drivers would have gone a long way, now no one would care.

- Absurd 'fanboy' attitude towards certain companies. The CEO of Creative has a passionate hatred for Microsoft. This is why MS had to develop its own drivers for Windows 2000/XP for the SBLive, and why there are no drivers for their products in Vista. Likewise, they have repeatedly had poor dealings with other manufacturers, and have treated competitors in ways that were they not a Singapore based business they would have been prosecuted in the US or EU for(Aureal is the obvious example, but they did the same to numerous smaller companies in other markets). Business is dispassionate, you do not refuse to be part of a standard(UAA) simply because you dislike the standard bearer when they hold 95% of your target market. You do not foster bad feelings among the larger market, making it unlikely that others will work with you, at some point you may need some allies.

As far as I and many in the industry are concerned, Creative is reaping what they have sown. They were lucky enough to set a standard and they rode that single success for years based on their brand name alone. Even now there are plenty of oppurtunities in their original market for them to revitalize thier success(UAA, for instance, can be paired with a powerful DSP and it will use it for accelleration), but it is doubtful that Creative will capitalize on those oppurtunities, they would rather go out of business than do things in any way other than their own.

So long Creative, I'll always remember you as the guys who gave me great sound in Doom, but I won't shed a tear for your passing. In the long run, Creative will perform its greatest service by serving as an object lesson for other companies on how not to do business.

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