Creative Technology reported a net loss of USD$14 million for its fourth quarter ended June 2009, including a provision of US$12.8 million for potentially unrecoverable loans due from a former subsidiary, compared with a net profit of USD$116.2 million a year ago.
Total loss in FY2009 is USD$137.9 million, compared with net profit of USD$128.2 million in FY2008. The previous year's profit was mainly due to a gain of USD$147.9 million from the sale of Creative's headquarter office and restructuring charges of USD$11.2 million.
I am sure its management knows that it is in need of new ideas that are sustainable. There was a rumour that there could be some sort of a tie up with THX. Whatever it is, the lifeline has to come really soon. Otherwise, the only card left is new Zii platform.
I don't know what it is but I hope for the sake of Singapore's entrepreneurial spirit and Mr Sim's good spirit, the company would turn black soon.
6 comments:
please don't be so narrow minded and filled with national pride to associate creative technology with singapore's entrepreneurial spirit...
as a citizen of singapore, i find it an insult...
whichever the case, sim runs his company like a traditional chinese boss and thinks he knows all, which is why his 'me too' method and adding product features without understanding providing the brand and consumer experience (both different issues, which your background as an accounts person would not differentiate) caused him to pick the wrong war to wage, (against apple)...
they sent their team to NUS to try to find out about creative's branding image to the students then, where upon hearing negative feedback, they disclaimed it, and induced the whole experiment with more positive words association than what they in reality are linked to.
that was a good 7 years back.
even their own design department is frustrated with the chinese emperor way (top down manner) of things are done, which means innovation can't be sparked... as mr sim is supposed to approve and veto every creative idea, giving the middle manager a free run of their salary? since it means if it's still managed in a small organisation manner, things fail, when you go on bigger scale.
they have retrenched without mercy, 50% of the design department has been axed, because of its loss making ideas from mr sim.
to look into the loss in isolation of its workings is the fundamental flaw why any cost accountant would fail.
it surprises me that you look solely on numbers and not ask question behind...
i understand that you teach cost accounting for ACCA, and the above surprises me at how lack of queries behind their operations that you instinctly not have and went into a simple 1-bit, i wish they did well for some misplaced nationalistic pride.
hope this provides you a balanced view, so that you can teach your classes with abit for depth.
Hi Anonymous,
Thank you for taking the effort to write, rightly or wrongly.
From the tone of your response, you are taking my comment too personally. Let us focus on the issue.
Mr Sim, rightly or wrongly, has achieved what you and I may not have achieved.. created a company, got listed in US, his sound card is part of the IT history, made millions and give away millions.
Secondly, perhaps one could choose to take the courage not to comment behind the skirt of "anonymity".
Let us respect each other view in a healthy and intellectually invigorating environment.
The crux of my comment is that it is sad that you look at the performance of Creative solely from the financial point of view, in terms of profit and loss only.
it is sadly narrow minded.
What I would have question in your shoes would be
1. not to link creative with any form of nationalistic pride, as it's clannish and backwards at best.
2. to ask questions to probe what has happened to the most important link of them all,
the future branding and design direction of the company.
coming from you, who lectures in performance management for a professional ACCA subject,
I think it's utterly lacking from the lines of your questioning, which strikes me as
1. null
2. nationalistic... and thus, backward-looking.
take a leaf from the international counterparts, and go do yourself a favour, get a branding book to read.
truely, most of the F5 lecturers appalled me in the lack of real world knowledge they have to the subject... you included.
Just for you,
I have specially highlighted the key words of this new business environment, that Creative failed to identify itself with, (which caused it to remain like its taiwanese counterparts, just a transition from OEM to ODM factory operators)
it's in my previous post, there are 2 of them, take it as a homework. I would return to see if you manage to get them right in your reply on this thread. If you don't, it's fine, but it would be a whole new useful paradigm for you.
Your choice, Pride or Knowledge.
Hi Anonymous (absence of courage?),
Your second posting is definitely an improvement over the first in terms of tonality.
I notice you do enjoy talking down to people, made a lot of wild assumptions about people you hardly know, have a lot of angst with lecturers or perhaps just me.
But I have allowed your two "wonderfully written" postings to be posted on the basis of no religious remarks and for the sake of exciting an intellectual discussion.
Till I know I am interacting with a responsible person with his remarks and comments, I will reserve further comment.
Good day.
hi there,
as promised.
1. brand experience
2. consumer experience
this is what creative did not understand, as most of the asian manufacturers could not.
apple understood that to differentiate their products, it was not a battle of features. (that sort of product features war was a passe of the 80's)
to improved their products, they look into improving the brand experience of the consumer. This is a holistic approach, which a company need to fork out in, in providing a consistent brand image. (not something to the characteristic of asian companies, who prefer a "me too" / "cost down" approach)
next, in delivery of ipod as the next generation music player, it was not in the product features of the player per se that lies the key to its success.
the focus on interaction design, in providing a never before one-touch scroll button, allowed apple to lead the pack once again, using design. (please note, design and aesthetics are two different issues)
Their bet on the one-touch scroll button enhanced the user experience of mp3 players.
on the other hand, what novel features have creative done?
1. creative added a radio FM
2. creative had a bigger hard disk space to their players
but creative missed the point...
it failed to excite the customers in the way Apple had.
that said, we need to bear in mind, Creative's mp3 player was the world's num 2 choice in terms of sales.
BUT, in terms of sales volume, creative was a very very very distant num 2... together with korean and taiwanese counterparts.
from the sum of your posts, I realised that it is demanding for an accounting professional to understand the importance of Branding and Design.
Perhaps its the way these two schools are inherently different.
Accounting requires the professional not to brainstorm and turn creative on accounting standards... as history has shown that accounting specialist who turned creative has crossed the wrong side of the law. (not all, but some) (and have caused banks to vanish :) ) perhaps, we need to drill accounting people to continue to be compliant and non-creative in evaluating matters, for starters.
However, such characteristics if applied on a branding, design, research consultant would mean he/she be replaced a month from employment.
I don't have the ready solution to rectify this problem. Other than, perhaps, the accountant is the work specialist who oversees details of financial reports, etc. But to run the company, we need someone with vision, foresight and courage to make mistakes, in this, we need someone who is a design background person, who sees the big picture of how he/she wants the co to grow into.
Steve Jobs is such a candidate. (he took graphic design, which he accounts for his taste preference, when he started apple) He is at best a generalist. But had a strong vision of how he wanted to position Apple, and roped in Jon Ives for the design execution. The rest is history.
Sim? He opened up a design branch, and set the department in the usual asian top down culture... where it's subjected to "if Sim says yes".
perhaps, it's a lesson to asians on the shortfalls of our ways. That we can't dream to want to breakthrough, yet, need to fear of backlash... cause the underlying result would be breeding a whole department of Yes Men... and that means when retrenchment comes, each and every design staff in that department should know their Ode to Obeying and Conforming caused their jobs to be burnt.
Such, is the thoughts that sparked in my head, when I look into the Total Loss in FY2009 of Creative's Profit Statement...
Hi Anonymous,
Bravo! 95% of your latest posting is sensible enough. While I may not agree thoroughly but it is a view.
You are getting closer to being graded "able to present his/her views without hurting the other part".
Keep it up. Cheers to that.
My simple conclusion to current Creative's situation:-
a) absence of a killer product after the famous sound card (as you alluded to too)
b) even if they have a product with some demand, quality is generally absence. (based on my child's experince with the dictionary thingy used in school).
Yes I am also aware of the various cost cutting exercises. But if it is necessary, it is necessary. Not sure how much experience you may have in running a business to understand that. (Do you feel a little uncomfortable after reading the last sentence? It is the milder version of how you talk.)
As a CEO with responsibility to so many other remaining employees and their families, he has to take charge.
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