The Business of Technology: Creative Labs
by Ryan Smith on October 2, 2007 5:00 PM EST- Posted in
- Bulldozer
Closing Thoughts
So between their business and technology, where does all of this leave Creative? Simply put, it would be difficult to argue they're not in a very bad situation.
On the technology side, almost all of their markets are either commodities or dying, and they're not the market leader in anything any more. Some businesses exist and thrive solely as a supplier of commodity components, but Creative isn't that kind of company. They need to be able to take a major part in a new high-profit industry to replace what they've lost from the sound card market, and they've yet to find something that can sustain them for long. Or to put things in another perspective: we don't see them as having the technology needed to carry the company.
On the business side, they're already in trouble from their technology issues. Their stock price is near record lows and they haven't been able to generate enough revenue to cover costs in a couple of years. Their saving grace at the moment is their Apple settlement, which has helped them turn a profit for this year at least. In the next year or so they may be able to take a piece of flesh from all the other major portable media player competitors, but there's a finite number of targets and as one-time payments the money won't last forever. For the time being Creative's business side can hold up the company, but it can't do this for very long, they need improvements on the technology side to bring the company back in to balance.
Looking at their research & development expenditures however, it paints a conflicting picture. A company in need of technological rejuvenation generally needs to be spending a lot on R&D, and this isn't the immediate case. FY2007 R&D spending was $64mil, compared to $77mil the year before and $82mil the year prior to that. We would have to go back to FY2003 to find a time they spent less on R&D, and that was one of their boom years. $64mil is not a small chunk of change to be spending on R&D (it's some 7% of all revenue) but it still leaves us wondering if they're going to be able to develop something to get the company out of its current rut. R&D spending only gets harder as revenue continues to drop.
In closing, it's too early to even be hinting at doom & gloom for Creative yet, but by now the first warning light has lit up. Things are not good for Creative right now, but there's a lot of time left. But can the company survive the dramatic shift required to make it? Only time will tell.
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Reflex - Wednesday, October 3, 2007 - link
"My concerns are purely on the surface and no self serving MS articles or videos will illuminate me to the real facts."This is not a Microsoft standard, it is an industry one. Work on it began back in 1995 and was originally pushed by Intel and several laptop manufacturers looking for a way to make machines cheaper. The AC'97 and (rarely implemented) AC'99 specs were the initial results of it. HD Audio/Azalia(UAA in Vista) is simply the latest implementation. It has been ignored from the beginning by Creative, while endorsed by the vast majority of the industry, from motherboard makers to OS venders to sound card manufacturers. The videos that were linked merely explain the MS implementation of what is an open and free standard.
"As to minimal class drivers, the only problem is that they provide minimal functionality out of a given device as i understand it. There is no room for a hardware MFR to expose new functionality unless it is adopted by everyone and as a standard. It removes the beauty of what R&D can do in moving technology forward, a minimal class driver is an unfortunate direction."
This is not true. The existing class drivers, as well as UAA, have the ability to be extensible. That means that while basic functionality is identical between them, special drivers can be created that expose additional features and abilities of the device to the OS. There is no real limitation here, and just as video cards can expose new functionality to game developers that are beyond the generalized DirectX or OGL API's, a device with a class driver can extend the interface for applications that wish to take advantage of it.
"Overall stability can never be attained, MS themselves consistently prove that, but their are other ways to move in that desired direction rather than a minimalistic approach."
This is not really the point. The point is that when you have crashes you analyze what caused them and sort them into buckets to determine what causes the most problems. Microsoft has stated publicly that 97% of all OS crashes are due to third party drivers on their OS's. This mostly has to do with the fact that most drivers in the past have been kernel mode, ie: the operate at Ring 0 and as a result can take down the entire OS if they do anything wrong. The point of a class driver is that the kernel mode portions of the driver are developed by and the responsibility of Microsoft themselves, and that those class drivers provide a 'hook' that the third party can use to write a driver more specific to thier device, but where their driver operates entirely in user mode. This improves the OS in two distinct ways when a crash occurs:
1) If a crash happens that takes down the OS, it will obviously be a bug in Microsoft's portion of the driver, and they will own all of that code and be able to issue a fix on thier end without waiting for the third party. Furthermore, such a fix will improve stability for ALL devices of the class, rather than just that specific item of hardware.
2) If the crash happens with part of the driver that the third party developed, the OS will not go down with it, and in fact can simply restart the driver safely with no effect to the end user, no data loss, or anything else. The OS stability is not in any way impacted.
This also makes driver development cheaper since Microsoft is taking on the development of the most complicated portion of the development and taking responsibility for the results, plus users benefit from a true 'plug and play' experience, everything just works, even if its not utilizing all features(need the third party driver to enable everything).
Now in the previous two paragraphs, feel free to substitute 'Microsoft' for 'Linux' or 'Apple' since they also can and are implementing this system as well.
Hope that makes some things clearer!
Ryan Smith - Wednesday, October 3, 2007 - link
MadBoris, you're pretty much spot on. From everything I've researched in to UAA there's no real option for interfacing hardware with the audio stack; you have to use another API like OpenAL to do so. This does bring about that level of stability Reflex was talking about, but it effectively fixes everyone's hardware at a least-common-denominator (though it should be noted that you can bolt on software to the stack to do effects, Creative already does this in some places with Vista; it eats up even more CPU time though). This is great for RealTek and the like who are making low end gear, because now Microsoft is doing all the hard work for them and they can ship what amounts to a DAC with a few lines of code once they no longer support XP.Microsoft's vision going forward is that all audio effects will be done in software. For example, a game like BioShock will build or license an audio engine (FMOD) that can do all of these effects we've come to expect via software, then Vista lets the game see each speaker to write out the appropriate hardware. Good processing is expensive (the X-Fi and its 51mil transistors isn't just sitting on its butt), so what we get today isn't very good processing.
Things may improve with more processor power. They may also just stay the same while companies focus on graphics over audio.
BitJunkie - Wednesday, October 3, 2007 - link
So how did we end up in this position? What prompted MS to be so heavy handed (or radical?) in their approach to changing Windows audio? There is no major advantage to MS in dictating things in this way that I can see - other than stability.There has to be some reason for the Microsoft Azalia / intel HD Audio standard becoming dominant, what exactly was Creative doing or not doing - with their defacto monopoly on gaming audio? All interesting questions in my view. Would be good if anyone could shed some light on them.
I can't help but feel that as consumers we've lost out because of Creative's business practices and attitude - maybe I'm being unfair in that. Ultimately though Creative have to carry the can for where they are at present.
Reflex - Wednesday, October 3, 2007 - link
"From everything I've researched in to UAA there's no real option for interfacing hardware with the audio stack; you have to use another API like OpenAL to do so."This is explicitly not true. UAA does allow flexible DSP's to be developed for hardware accelleration. Re-read the spec if this is the indication you got.
"Good processing is expensive (the X-Fi and its 51mil transistors isn't just sitting on its butt), so what we get today isn't very good processing."
First off, no, its not expensive. The reason the X-Fi is 51 million transisters is because it is a software designed chip. That is a notoriously transister intensive method of designing a chip, and they have done little manual tweaking to reduce its transister counts. This is one reason that on the surface video chips appear to be more complicated than CPU's, but ask designers of both what they think and you'll find that GPU's aren't even in the same league. Creative went cheap on the design process and the result is that their chip is transister heavy.
Secondly, reviewers of Bioshock who tested it on Vista noticed that the sound was exceptional. I would suggest looking into that. It really had no serious issues although it did have a bit of a perf hit(but this was mostly due to audio drivers not being mature).
BikeDude - Wednesday, October 3, 2007 - link
At first I thought "great, let us see what is going on with Creative then", but the article left more questions than answers.I would love to learn why Creative's drivers "suck" under Vista. I can't remember seeing an article explaining how Vista's audio stack works, nor why hw acceleration is less important.
I also see many commenters here who say MS killed EAX. How so? There are plenty of existing games supporting it? E.g. in BattleField 2, to get an echo effect inside a warehouse, you are pretty much limited to the X-Fi as other EAX implementors don't go far enough. (at least that used to be the case)
Instead of answering such questions, Anand presents us with a "why buy/sell Creative stocks". Honestly, I could not care less about the stock market at this moment... :P (not exactly stable at the moment, now is it?)
Zak - Wednesday, October 3, 2007 - link
"a company being forced out of business" - CL is getting the taste of their own medicine...Z.
MadBoris - Wednesday, October 3, 2007 - link
I was a real fan of Aureal back in the day.I am good with that, what goes around comes around.
I just don't like the way it came around with MS drawing the line, MS is a great chess player thinking many moves ahead, where it's difficult to see where they are going.
BitJunkie - Wednesday, October 3, 2007 - link
MS did a lot of work behind the scenes on Vista that changed the way audio is handled. For those that are technically orientated and can understand pretty techy chat there's a good video here: http://channel9.msdn.com/ShowPost.aspx?PostID=1468...">http://channel9.msdn.com/ShowPost.aspx?PostID=1468... on the vista audio stack.For a higher level overview, there's a good video here: http://channel9.msdn.com/ShowPost.aspx?PostID=2155...">http://channel9.msdn.com/ShowPost.aspx?PostID=2155... in which the move from AC'97 to HD Audio (Azaelia) and the requirements for hardware design and driver programming are discussed. You can see that a lot of effort was focused on routing circuits on PCBs to avoid noise and to design hardware to minimise interference. Sounds like an OEM gave Scoble a call and bitched about the Vista logo program back in 2005 - regarding the audio stack perhaps.
It's all MS "propaganda" but gives a good insight in to their design philosophy. It also gives a better understanding of why Vista is a big step forward.
Christobevii3 - Wednesday, October 3, 2007 - link
How can you only blame the market?First up creatives pricing sucks. Even an entry level card is nearly $100 on the x-fi or was when i looked. So what did this $100 offer me?
1. A sound card that can't do dts encoding for games to my 5.1 receiver.
2. Drivers that are worse than a steam update
I haven't used a creative card since their sblive in 1999 because of the drivers. It worked ok on an fic az11 but when i upgraded it crackled like hell. But not only that, when i tried to update the driver to fix it, it hard locked the os but even safe mode couldn't uninstall the drivers. The next setup of trying to get it to work failed and the drivers had grown to roughly 60MB. So I gave up and just dealt with onboard sound.
Now, I have an HT omega sound card and love it. The drivers only problem is the mic boost button has to be rechecked on startup!!! Not only that but the drivers are like 15MB 8 years later after creatives and i can do dts output to my receiver in realtime. Interesting that the $60 sound card i purchase has now gotten so popular that it is $80, but also that it uses higher quality solid state capacitors where an equal creative has old style ones suseptable to rotting out.
Last but least, screwing over aureal and then not supporting a3d. Fuck that.
cosmotic - Wednesday, October 3, 2007 - link
I can't believe no one has mentioned Sensaura yet. Its another company, like Aureal, that had a superior product which Creative bought for their IP.Sensaura produced software that let other sound card manufacturers take advantage of A3D, DirectSound, OpenAL, and EAX 1 and 2. For years third party sound card manufactures have had this same list of supported APIs without adding new versions of EAX, most likely because Creative now owns them.