[ image disabled ] Fourth Quarter Financial Results Creative has released their Q4 earnings report in which they still suffered some losses and are slowly making their way back to profitability. Like the previous quarter this was due to the collapse in flash prices: SINGAPORE - August 10, 2006 - Creative Technology Ltd. (NASDAQ: CREAF), .Sales for the fourth quarter were $230.9 million, compared to sales of $305.4 million for the same quarter last year. Sales for the 2006 fiscal year were $1.1 billion, compared to $1.2 billion for the previous fiscal year. Net loss for the fourth quarter was $12.7 million with a loss per share of $0.15, including a $10 million tax credit. This compares to a net loss of $31.9 million with a loss per share of $0.38 for the same quarter last year including an investment gain of $9.3 million. Excluding the investment gain, net loss for the same period last year was $41.2 million with a loss per share of $0.49. Read the full report HERE Q4 Conference Call Summary I just finished listneing to the live conference call about the fourth quarter earnings and will now provide a summary of what was discussed. I'll first summarize some areas more important to our website: 60GB Vision:M confirmed -Although the speaker, Craig McHugh, President of Creative Labs did not specifically say 60gb Vision:M is coming soon in those words, he mentioned a 60gb player twice. The first was more vague as he was talking about HD players in general and how there are possibilities for higher capacities. The second time, he was asked about the MP3 market and had the following to say: "As I mentioned earlier, what we're doing with the Zen Vision:M at the $299 level and then increasing it when we add 60gb's.... we're seeing so much excitement around video..and as you know that requires the 20, 30, 60gb configurations which are ideally suited for the Zen Vision:M ...and Zen Vision" X-Fi Everywhere -They want to move X-Fi outside of the PC and focus on consumer electronics and bringing the technology to Mac platforms, and notebooks. -They have plans for X-Fi everywhere (the way he said reminded me of Microsoft's "Live Anywhere" -In the future we will see a product that will allow you to connect the Zen Vision:M to it and get X-Fi sound output. The same with other players as well. Headphones -Creative will be competing with high end companies (like Shure) with the release of their Zen Aurvana's and 3 more high end headphones/headsets in the future. They are taking this sector very seriously as they see potential for growth Traveldock Speakers -Creative wants to be the leader in portable speaker solutions, not only for Creative players but for other branded players as well. They want to expand their traveldock line so that various players can use them. Listen to the entire conference call HERE To see the rest of my summary click the link below: [ Read the rest ... ]
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| nrage007
Aug 09 (2006) 09:54PM | Did they mention marketing or the Apple lawsuit? I haven't seen any creative ads in the US and I haven't heard much about the lawsuit recently in the news... |
| ssjmichael
Aug 09 (2006) 09:57PM ![]() | Read the extended post. Someone asked about the lawsuit and they were quiet about it only reflecting what was officially said in June and mentioning that they seem open to a settlement if possible (specifically stating they're open to an amicable solution) They did not discuss marketing in detail |
| Jesus The Mazu
Aug 09 (2006) 10:06PM ![]() | hells yeah...60 banger!!!! |
| swh
Aug 09 (2006) 10:21PM | there will be a zen vision 60GB if my sources are correct. |
| konechiwa
Aug 09 (2006) 10:27PM ![]() | i wanted a 60gb originally. damnit creative release players at one time. the x-fi addon does seem nice. [ edited Aug 09 (2006) 10:27PM ] |
| 3284lmm
Aug 09 (2006) 10:30PM | If they want to compete with Shure, they need to get their support service in line first Shure replaced my earbuds free of charge in less than two weeks. Add to that, I even modded my e2c's in a way that suited my needs best. Best support i've seen in a while (compared to arguing on the phone with Sony for an hour). On the otherhand, i'll be first in line for the 60gig V:M, oh, and the radio dissapeared off my Vision:m's menu. Hey, what do ya know? Good time to use that 2year service plan at Crutchfield (when the 60gigger gets there, of course ) |
| Bitshitter
Aug 09 (2006) 10:48PM | "f.) building more awareness for upcoming players" = marketing.........sounds like they may be waking up, finally.... |
| The Big M
Aug 09 (2006) 11:32PM ![]() | maybe I should wait for the new travelsound speakers before I make my decision on what speaker to buy. When are they comming out? |
| perverdz
Aug 10 (2006) 01:26AM | Scratch resistant 60gigger ZVM + X-Fi + Zen Aurvana... sounds good..!!! |
| rockinamigo14
Aug 10 (2006) 03:24AM | just think of this: portable X-fi speakers with a dock for the ZVM one can dream... |
| SlimDan22
Aug 10 (2006) 10:05AM | I like to see if the player is alot more thicker or did they get a new kinda of thinner HDD Im kinda mad cuz i woulda liked a 60 gb so i wouldnt have to worry about video sizes |
| kingone
Aug 10 (2006) 03:07PM | i wanna buy a travelsound! |
| udauda
Aug 10 (2006) 04:20PM ![]() | ZV:M x-fi Ver. eh? oh yeah bring it on |
| Utew
Aug 11 (2006) 02:49AM ![]() | ..still hemorrhaging shekels, I see.... albeit at a reduced rate.. rockinamigo14, I like your dream.. hope you don't mind if I share it with you.. [ edited Aug 11 (2006) 02:51AM ] |
| davinp
Aug 11 (2006) 10:56AM | In order to save money, Creative will have to trim it's MP3 line, which currently consists of 30 models. Even Apple is smart enough not to offer than many. |
| The Big M
Aug 11 (2006) 11:34AM ![]() | In order to save money, Creative will have to trim it's MP3 line, which currently consists of 30 models. Even Apple is smart enough not to offer than many. True, Half the MuVo line in too outdated to compete in the tough market, even though they were pretty decent mp3 players in their day. |
| MT
Aug 12 (2006) 04:32PM | I see a future MP3 market with no Creative players. It will happen. They have tried and failed. I'd love to say that they tried valiantly, but that would imply they were run by men of ability who ran into a juggernaut. More like morons if you asked me. Tell me something, what has changed to give anyone hope for Creative? |
| ssjmichael
Aug 12 (2006) 06:34PM ![]() | MT: 1.) They have the hottest player out right now for over 8 months now 2.) They're selling high capacity flash players at cheaper prices 3.) They're putting out high quality earbuds 4.) X-Fi is a hot commodity and is only going to get hotter. Maybe you have no market sense, but those 4 things alone show Creative is far from quits in the DAP market. |
| Bitshitter
Aug 13 (2006) 12:44PM | well, they are surely showing that they know how to get to third base....... now, what else do they need to do? ![]() |
| MT
Aug 14 (2006) 11:13AM | SSJ: I truly have no idea why you responded to my post in the manner in which you did. Apparently you misunderstood it. It was a prediction (read the first sentence) based simply on my view of past management practices (read the rest of the post). All of their past bumbling has not put them in a position to compete effectively. They are trying to crawl out of a deep hole and, despite their best efforts, I believe they will fail. When I asked what has changed, I surely thought any response would be "they now have their act together" or "they hired some hot shots who are going to turn things around" or, more likely, "they haven't done a thing, other than think of new ways to shoot itself in the foot." Not "they have great products." Your points: 1. I agree that the ZVM is a great product, never said it wasn't. I love my ZVM. It's a hot product but that's relative. It is still only a nit when compared to the iPod beast. How are they going to change that? 2. Yes, they are. However, are they truly making a dent? Are they selling well? Enough to contribute to profitability? 3. Earbuds? Are you serious? Do you really think that this will help them into the black? Are you serious? Your other points are good points, though irrelevavn to my post, but this one is silly. 4. "X-Fi is a hot commodity and is only going to get hotter." I agree. But, is it enough to help Creative become a PROFITABLE player in the MP3 market? I hope it does, but only a fool would predict that it will, as opposed to "it might." And, the best predictor of future performance is past performance. Until they prove otherwise, that's what I base my opinion on. Look at the history of Creative in this market. They haven't done well. Maybe it was because the iPod juggernaut came on like a tidal wave and they were unprepared for it. Anyone who claims that they have responded intelligently is nuts. Two examples serve to illustrate how stupid the Creative people are (were?) who run the ship. The ill-advised $100MM advertising venture. The beer muscle posturing didn't work. And which toilet did they flush they're $100MM down? Although I do not know truly what $100MM buys you these days, but I never really saw much of a marketing thrust. In any event, they spent a lot of money (or did they?) and appear to have gotten zero results. Also, they bungled the distribution when the ZVMs were released. They were very difficult to find at the retail level (mail order too). It took some time for them to bring the retail supplies up to snuff. Why? Because they were more popular than Creative expected? Maybe, but is that justifiable? Now, you can quibble with my points, but you cannot deny that they have fumbled the ball. I believe they have great products. The ZVM, in particular. We actually own two of them (mine and my wife's). However, they have not shown that they know how to SELL the product and that is the name of the game. I believe they will not be around for the long haul. I hope I'm wrong. |
| Bitshitter
Aug 14 (2006) 12:50PM | calm down, MT...ssjmichael just responded to your comment...to make declarative statements like, "I see a future MP3 market with no Creative players. It will happen. They have tried and failed." at a Creative fan site should be expected to illicit even harsher responses. Also, the statement, "They have tried and failed" is not a prediction, it's (once again) a declarative statement, which would imply you intend to be stating a fact, or common knowledge, which is untrue..... While I may agree that Creative should be doing more with advertising within this country (because, if for no other reason, the % of DAP sales in the US is the larger % of the overall sales in the world-wide DAP market, and because the iPod home country is the US) to get more of the attention of the consumer base, this does not by any means indicate that Creative has failed..... With the introduction of the ZVM and Zen V, Creative has taken a giant step towards presenting itself as a serious competitor to the iPod, and based upon other factors, such as product accessories, Zencast, firmware updates, and future technological aspects such as X-Fi, there's only the indication that Creative is playing this game to stay in it for the long haul. Sure, Creative has made blunders recently, and it's paying for it with it's fiscal losses (at the moment), but please remember that even Apple needed a financial bail-out from it's biggest rival, Microsoft, just before the first ipod hit the streets, so this is something that Creative can ride through.... these are responses to the last part of your first comment, " Tell me something, what has changed to give anyone hope for Creative?", which was not a prediction...I think ssjmichael's response was also intended as an answer to your question.... again, this is a public forum, and all postings are welcome, I guess (within whatever rules there may be), but just be a little more prepared to receive replies like above, and some that may be even more indignant, if you're going to phrase your comments with such declarative statements of so-called "facts" or "knowledge"......things like this gets people's dander up... |
| ssjmichael
Aug 14 (2006) 04:30PM ![]() | Yeah, as Bit said I was answering your question of "What has changed to give us some hope". I'm sorry if it came off as too rude. It really wasn't meant to be so, just a direct answer to some puzzling statements of yours, To me statemens like "They've tried and failed" did not make any sense to me when they have the best DAP out right now. I do believe their headphones are going to be more popular in the future, and will compete with Shure and Etymotic (among others) in time. If they sell well, and the other factors I mentioned go as planned, then I don't see any reason why they wouldn't make profits and thus stay in the DAP market. The president of Creative is not the type of guy to call it quits in this industry. DAP's make up the majority of their revenue, so if they drop out of that, then they might as well file bankruptcy as a company. We all want more for Creative because we see the potential more than most. It's not something that happens overnight, but from the last quarter to this quarter we are definitely seeing improvements and revamaped strategies. I apologize again if my comment above came off as too rude. [ edited Aug 14 (2006) 04:45PM ] |
| Zenchick
Aug 20 (2006) 09:49PM | I see a future MP3 market with no Creative players. It will happen. They have tried and failed. I'd love to say that they tried valiantly, but that would imply they were run by men of ability who ran into a juggernaut. More like morons if you asked me. Tell me something, what has changed to give anyone hope for Creative? I disagree. Look at how successful Creative's DAPs have been despite the near-lack of any advertising.There is definitely room for improvement - there's no arguing that - but if Creative can trim down its DAP-sprawl to just two or three models (MuVo/Nano for the flash crowd, a low-end Zen - which should be called something else - for the budget-minded HDD crowd, and a high-end Zen - like the Vision:M - for the rest of us), and start aggressively advertising, then I have no doubt that "Zen" will become just as much of a household word as iPod - if not more so! But as it stands right now, Creative has entirely too many product out, which means too many products to support (which translates to poor customer support all around), and means that Creative has nothing by which anyone can identify it. Worse yet, Creative is rolling out so many models so quickly that many people are afraid of buying one for fear that it will be obsolete and unsupported inside of a month! If they can trim down to all but three of their best models, I really think they can beat iPod! Oh -- and get an online video subscription service started ASAP! [ edited Aug 20 (2006) 09:56PM ] |
| OhioState87
Aug 22 (2006) 12:50PM | CREATIVE NEEDS TO ADVERTISE A LITTLE BIT! |