Sounds like an opportunity

Sounds like an opportunity

There have been some big changes at Creative Pacific, the Australian distributor of Singapore-based multimedia PC component manufacturer Creative Technologies. Having recently launched the Sound Blaster Live! audio card and its Environmental Audio platform locally as well as introducing a design-to-order dedicated gaming PC - the Blaster PC - to retail, managing director Michael Wong spoke to Gerard Norsa about the convergence of entertainment in the modern PCARN: What exactly is the relationship between Creative Pacific and Creative Technologies?

Wong: There is a big difference yet a close relationship between Creative Technologies and Creative Pacific. Creative Pacific is an Australian company with the majority of shares held by my wife and myself. Creative Technologies does have a share in it and we are the exclusive Australian and New Zealand distributors of its consumer multimedia PC components, but we operate as a totally independent company.

Where does most of your revenue come from?

We are very strong in retail with components such as 3D graphics accelerators, multimedia upgrade kits, audio cards, DVD and now Cambridge Soundworks speakers which Creative Technologies bought about 12 months ago.

We distribute direct to large retail stores and through distributors to the dealer channel. We also sell a lot of product to OEM manufacturers and various assemblers and there could be new markets with the introduction of the design-to-order Blaster PC.

While on the Blaster PC, is it a big change of direction from distributing components to building PCs?

Creative is not embarking on a mission to become a PC company. Our mission is to create the ultimate multimedia PC experience - specifically for gaming and entertainment.

As we already distribute most of the com-ponents making up a good multimedia PC, we wanted to accelerate the convergence of all these new technologies and promote the Creative brand name at the same time. By putting all these components together we are delivering the type of PC that many serious gamers have been building for themselves but with better integration.

Is there the chance of creating competition and therefore conflict with some of your customers who are also PC assemblers?

There is no competition with assemblers because the dedicated gaming PC is a whole new concept. This is not going to be the cheapest machine on the market by any shot and it is aimed at a very narrowly defined niche market. Many of our customers just see it as a great extension to their range. As we can ship all the components to them immediately and in one box, they don't have to source from all over which is a bonus for them. We don't need to be PC manufacturers to sell Blaster PCs because we can outsource assembly. Our role is to apply our minds to the marketing and development of the product and then supply all the components. Someone else will do the assembly.

The other big development at Creative has been the environmental audio. What is significant about it and the Sound Blaster Live (SBL) card?

Sound Blaster Live is the missing link in the multimedia PC experience. First there was the introduction of graphics about 10 years ago and then came audio with the Sound Blaster card about nine years ago. That upgraded the PC experience significantly while graphics remained fairly stagnant without much improvement for a while.

Then all of a sudden graphics were given a huge boost with the voodoo 3D-accelerator technology but until this environmental audio platform was developed, there was no parallel upgrade in the audio experience. Audio has now caught up again.

How can retailers help themselves sell Creative's Sound Blaster Live! card and Blaster PCs?

The biggest challenge for us is how to get the whole environmental audio and quality gaming experience out to end users. Unless they can engage in the whole multimedia experience, they will never know just what the real advantages are.

It is important for us to assist retailers create that experience. Once the end users can listen to it and see it working, they will be able to compare it to existing PC audio.

How hard will it be to upsell users to better speakers with SBL?

We have to create a paradigm shift. People are just so used to using tin-pot PC speakers even when they use a very expensive sound card. Retailers have to advise consumers that that is wrong. They are missing the full experience.

The channel has been a little shy on selling quality speakers in the past, but they have to realise they are the key to delivering the full environmental audio experience.

That is really the reason why Creative Technologies bought Cambridge Soundworks. Without the speakers we were not able to create the full experience and bring to market the type of quality that we wanted at a consumer price.

How is the acquisition of Cambridge Soundworks by Creative going to benefit your resellers and end users?

When you look at the market for SBL, the first problem is that the traditional two speaker set-up is a very limited experience. Until recently, buying better quality speakers for your PC was an expensive proposition. Creative entered the speaker business to accelerate the rate at which quality PC speakers were available at consumer prices.

If we wanted to bring the whole enhanced audio experience to market at an affordable price we had to be able to deliver speakers as well. Cambridge is a very strong hi-fi brand name and does very well in the US. It is all part of our goal to create the ultimate experience at the right price. We have to work on bringing the price of speakers down and when we can do that we will naturally be bundling them with SBL which will work well for retailers. It is such an obvious future promotion.

What sort of innovations do you see Creative bringing to the PC speaker market through Cambridge Soundworks?

The R&D people at Creative in Singapore will be looking at different ways of configuring speakers. Cordless systems will help reduce the need for wires running everywhere.

Environmental audio allows for unwanted sounds to be cancelled out as well. It is all about creating the sound environment you want and there has to be integration with all that sort of technology.

Looking ahead, we have to resolve this issue of how we connect up speakers. It is not just wire to the computer but the source of the power - how do you supply the power - and I think that there are a lot of R&D challenges there.

After the early adopting gamers, which is the next market that you see capitalising on the SBL platform?

Anybody who is going to use multimedia in their CD or DVD publishing will benefit from environmental audio.

Corporates will design it into their profiles as a matter of course and it would be naive of them not to take advantage of such tools. They are very easy to program.

The environmental audio platform enables you to create your own environment and the opportunity to integrate that with the latest 3D graphics is infinite.

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