Creative Technology charts new course

By Tao Ai Lei, IDG Singapore

Sound Blaster manufacturer Creative Technology will diversify into new areas, while keeping the well-known sound card as the company's mainstay product, according to company officials.

Sim Wong Hoo, chairman and CEO of Creative, announced that he intends to "create the coolest PC" for the home market. In addition to providing audio and Internet applications, Creative recently launched its digital video disk (DVD) kit. Next in line are 3D graphics cards.

"Our core strength is the audio business. It has higher margins, lower risk, and we can leverage our name and distribution channels," said Sim. He aims to maintain Creative's lead in the audio business with operational efficiency, and be "the most cost-effective sound card builders".

The audio market is growing at 20 per cent per annum, with more than 60 million units released. While much of the competition is focused on the OEM market, Sim noted that Creative's strength is its brand-name in the retail market. However, it is making inroads into the OEM market, with its Creative ViBRA solutions for the mass market.

Currently, more than one million units of Creative's hottest selling product, Sound Blaster AWE64, have shipped. Sim aims to convert the 40 to 50 million Sound Blaster clones to AWE64.

Creative also announced new products:

DVD - DVDs are expected to be a main driving force in Creative's sales and profit growth. It launched its next-generation PC-DVD upgrade kit, the Creative PC-DVD Encore Dxr2, at what it called an "industry stop-press RRP of $550 (ex-tax)". The solution comes with Creative's DynamicXtended Resolution card, the Dxr2 and the PC-DVD-ROM drive, that is compatible to all CD-ROM formats. Sim expects monthly sales of a "six-digit nature" for the product next year. "DVD will replace CD-ROM. In the meantime, it is a price issue. We expect some content makers to switch to DVD by end-1998," said Sim.

Graphics - Creative intends to launch Graphics Blaster Extreme in October 1997. It is a graphics card with 3D rendering and texture mapping, targeted at entry-level users to power users. Competing against 3D cards from Diamond Stealth and Matrox, it supports a resolution up to 1280 x 1024.

Internet - Creative Inspire is Creative's own Internet application that aims to deliver content over the Internet in the same way radio and television stations broadcast music and entertainment programs. Consumers can "tune-in" to Creative's unique channels like Creative Games Network, Undiscovered Artists and Music Mix.

Creative Inspire is now available at:

Vendors agree on magneto-optical disk specsBy Rob GuthA group of hardware makers has agreed on specifications for a magneto-optical disk that could challenge the forthcoming rewritable DVD disks.

The group, led by top Japanese electronics vendors including Fujitsu, Hitachi and Sony, expects to submit final specifications for the format to the International Standards Organisation later this year and to ship sample products early next year, a Fujitsu official said recently.

Supporters of the Advanced Storage Magneto Optical (ASMO) format also include Matsushita Electric Industrial, Philips Electronics NV, LSI Logic, Sharp and LG Electronics.

Under the specifications agreed upon, the ASMO 12cm disk will have a capacity of 6Gb and will be backward-compatible with today's CD-ROMs and DVD-ROMs, the official said.

The vendors played down the challenge that the new format will present to consumer uses of the rewritable, or DVD-RAM, systems, while saying that the ASMO system will be better suited for corporate use.

"The DVD-RAM is great for consumer appli-cations, but the ASMO is great on the computer side, where data integrity, security and rewrit-ability are important," the Fujitsu official commented recently.

Optical drives to exceed 70m this year

By Torsten Busse

Sales revenues of CD format disk drives will reach $US10 billion by 2000, with unit shipments by then totalling 106 million, according to a new report published by market researcher Disk/Trend.

Shipments of CD-ROM drives remain healthy, which are expected to account for 66 million this year, supplemented by 2.2 million CD-R write once and CD-RW rewritable drives (see story below right), plus more than half a million new DVD-ROM models.

But sales of CD-ROM drives will begin to decline in 1999, with DVD-ROM drives taking over leadership of read-only drive shipments in 2000, said James Porter, president of Disk/Trend.

The ongoing debate over different formats for DVD writable drives will have no impact on the DVD-ROM market, Porter said.

"We also don't expect DVD writable disks to replace floppy or hard drives, because they will be much higher priced and price is the most significant characteristic in the disk drive market," he said.

Market researchers at Disk/Trend expect a further transition to 32 x CD-ROM drives from 24 x by the end of 1997, but this may be the last significant CD-ROM generation, as industry interest is shifting to DVD-ROM drives.

Writable versions of CD format drives have grown rapidly in shipments, as retail prices dropped below $US500 in recent years, Porter said.

In 1996 shipments of CD writable drives reached 1.4 million, and Disk/Trend forecasts 4.7 million drives will be shipped in 2000.

Current shipments are dominated by write-once CD-R drives, widely used in business and professional applications which require quantities of disks too small to justify the cost of the mastering process for mass duplication.

"We expect the same to happen in the DVD market," Porter said.

However, shipments of rewritable CD-RW drives are starting to take off this year and will replace write-once drives during the next few years.

Also with the first rewritable DVD-RAM being announced, these drive types will provide the majority of shipments in 2000, he said.

Booming shipments of CD-ROM drives have created a significant business market for CD-ROM disk towers and automated libraries, the strength of the US manufacturers which have the knowledge and capacity of automated assembly, Porter said. "It's a matter of being closer to the application," he said in reference to the US dominance of the disk towers and libraries market.

Of the 64 manufacturers of optical disk libraries and towers worldwide, 36 firms are based in the US, with Hewlett-Packard leading in sales revenues, holding 19.2 per cent of the worldwide market in 1996.

On the other hand, of the 53 companies making optical disk drives, 44 companies are based in Asia, with the majority in Japan. With a rating of 18.4 per cent, Matsushita Electric, as the sales revenue leader in 1996.

Rapidly growing shipments of towers, which consist of a stack of drives ready to be loaded with disks, will reach an estimated total of 47,000 units in 1997.



Optical disk drives - Worldwide forecastUnit shipments (in 000's) 1996 1997 1998 1999 2000CD Format Drives (read-only) 55,570.4 66,752.9 78,179.0 88,455.0 99,181.0CD Format Drives (writable) 1418.5 2239.8 3116.2 3901.0 4702.0Read/Write Drives (less than 2Gb) 11,398.0 1783.4 2049.3 2099.5 1813.0 Read/Write Drives (more than 2Gb) 8.9 23.9 67.6 195.8 432.2TOTAL 58,395.8 70,800.0 83,412.1 94,651.3 106,128.2(CD format drives include CD and DVD types, and read/write drives include write-once, rewritable and multifunction types.) Source: 1997 Disk/Trend ReportIomega drives storage marketBy Wylie WongInvestors should snatch up Iomega stock as fast as PC users are gobbling up the com-pany's Zip and Jaz drives, financial analysts say.

Faced with no substantial competition, the storage maker has become the dominant force in the market, analysts say. Iomega has increased its sales by bundling its drives with those of the top PC makers.

"Jaz on the high end and, Zip on the low end have been entrenched as sort of de facto standards," says analyst Stan Corker. "It's become so popular so quick, and the installed base is so strong now."

Iomega has shipped 7 million Zip drives in the past two years and three months, Corker says.

Analysts say similar technology, the LS-120 SuperDisk manufactured by a division of Matsushita Electronics in Japan, is having a hard time making headway against Iomega. A recordable digital video disc drive, called DVD-RAM, may one day be a threat to Iomega. But by the time it is released in about two years, Iomega will most likely have cornered the market, analysts say. "The DVD-RAM is too far out and too expensive to impact Zip, although in the very long term, it could have interesting possibilities," Corker says.

Analyst Howard Rosencrans says DVD-RAM wont hurt Iomega. "Within two years, Iomega will have established the standard for computers. Two years from now is much too late," he says.

Iomega's strategy is to focus more sales to PC vendors. Sales directly to PC makers have increased 10 per cent this year - to 40 per cent of total sales in the second quarter, said analyst Brian Goodstadt.

CD recorders burn . . . and burn again

By Peter Stoller

CD recorders are hot items, and with good reason. CDs offer high-capacity, long-lived media that's ideal for archival storage. But CD-R has one glaring limitation: you can only write a disc once. CD-Rewritable (CD-RW) technology changes all that. For instance, drives using the new Ricoh MP6200S mechanism let you reuse discs up to 1000 times.

CD-RW technology works much like CD-R, which burns dark spots into a layer of reflective material inside the disc media. But unlike CD-R, CD-RW burns semipermanent dots onto a layer of a metal alloy. Left alone, a CD-RW disc will hold data for 30 years or more. Reheat it, and the data disappears and the disc becomes reflective again.

CD-RW drives support Universal Disc Format (UDF) - a platform-independent file system designed to be more versatile than the current ISO 9660 standard - and packet writing, which allows you to drag files to a CD.

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