Creative - long overdue losses reported

I think this is long overdue:

Creative, which is facing an uphill battle against the Apple iPod, reported a
net loss of 114.33 million US dollars in the three months to March, reversing
the year-ago profit of 15.91 million dollars.

This is overdue. Creative speakers are never recommended on any forum. Their X-Fi cards create incompatibilites with the nVidia nForce4 chipset by refusing to share resources. Whether it's the motherboard manufacturer's fault or Creative's fault, Creative was later, they should have worked around the problem. Well it's their loss - the people who bought motherboards with nForce4 chipsets, who are actually the main target segment of the X-Fi enthusiast sound cards, didn't bother much with the X-Fi.

With the entire enthusiast community not bothering much with good sound cards anymore, instead relying on the SPDIF digital audio bypassing the analog audio circuits and leaving the external amplifier to handle the digital to analog conversion. Why bother with a good sound card, actually? If you want good sound, the external amplifier's digital audio receiver circuit would be better than any, or at least at par.

The flash memory market is a huge casino, with odds of price drops far higher than price stability or price increases. And Creative actually builds MP3 players, though in form a `build to order' model, yet offers their channel price protection. Distributors are not fools. It's a crazy decision to stock flash-based MP3 players without price protection.

To compound the problem, Creative makes MP3 players in all the colors of the rainbow - and that's a recipe for a huge inventory problem. This is however, an insidious problem, and is difficult to trace from normal performance metrics.

What next for Creative? Man, I don't know. They don't pay me to consult! But it has to be this: they have to get better people into management. People with really current market and web feel. Multidisciplinary people, and people who are proof of the politics. Outspoken fearless people. And Creative gotta do it really quickly.

But for a company with still so many millions in the bank (est. US$250M ???) it's not difficult to reinvent itself IF IT WANTS TO. So many current opportunities now, including new netphones, web engines which Google left out, a platform for mobile audio, A2DP speakers, etc. Why bother to fight the brutal MP3 war if the result is already settled years ago - Apple won.

Ego has a lot to do with it. Ego is good, but in this sense, suicidal.

Google is full!

Check out this statement by Eric Schmidt in http://www.theregister.co.uk/2006/05/04/google_bigdaddy_chaos/:

Google's chief executive Eric Schmidt has hinted at another reason for the
recent chaos. In Google's earnings conference call last month, Schmidt was frank
about the extent of the problem. "Those machines are full," he said. "We have a huge machine crisis."

And here: http://www.iht.com/articles/2006/04/21/business/GOOGLE.php

Google's chief executive Eric Schmidt has hinted at another reason for the recent chaos. In Google's earnings conference call last month, Schmidt was frank about the extent of the problem. "Those machines are full," he said. "We have a huge machine crisis."

Like the rest of the Google cheerleaders around the world, I always assumed Google to just have to add new cheap machines to their borg network and voila, a few terabytes cheap new storage, without a worry of the machines failing or data loss. This is a huge surprise to me, that they can actually be full. So it's back to earth now for a company invaded by Aliens and enhanced using Alien technology.

Now that we're back on earth, I wonder - CAN GOOGLE EVER KEEP UP WITH THE WEB? CAN ONE COMPANY HAVE ENOUGH MACHINES TO INDEX THE ENTIRE WORLD?

Way back in Altavista, they planned to keep the entire web in one machine's silicon memory. Now that this is clearly rubbish, let's wait on the future to tell us whether google is rubbish.

How the heck can the US car industry respond so quickly to these rule changes?

Lately, the US was pretty much slow on emissions control while Europe and parts of Asia based on Euro X emissions regulations were tightening emissions regulations rapidly. Then now the US Attorney General himself whacks the Administration for tighter regulations.

This is pretty dire news for the American manufacturers, whose engines are antique - they got away with it for years by bypassing tight emissions regs by using the SUV=TRUCKS loophole - while the Japanese and European with their ultra-high-tech engines borne of Euro and Japanese regulations will probably rule the roost for years to come if Eliot Spitzer pulls this off.

In the light of my previous post about the horrendous sales showing of the American auto manufacturers, a further whammy courtesy of Spitzer may well do the Americans a favour by forcing them into what I see as inevitable - don't do the dirty manufacturing work, just design and market the stuff. Leave the manufacturing to the slittly eyed yellow skinned people.

Japanese Auto Manufacturers vs the World

After seeing these two articles:
http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/206241/1/.html
http://www.channelnewsasia.com/stories/afp_world_business/view/206272/1/.html

Not surprising, but that a long overdue final confirmation of the decline of auto manufacturing in the US.

All is not rosy for the Japanese though. After trying to understand the Japanese for years, and still learning, my take on the Japanese auto industry is this: while cars are still customized bespoke products without a generic cross-industry platform and industry standard mechanical specification for building cars, yes, the Japanese are KING and will not be toppled by the Koreans or the Chinese. The Japanese actually do these things cheaper than anybody in the world - bespoke customized platformless things.

Once a industry platform arises (much like Windows is a platform for all computers) Japan will fall faster than a falling brick, replaced by China. The traditional understanding that the Japanese cannot innovate and do best in a standards based industry - eg. manufacturing fax machines - is to a large degree false. At the risk of gross oversimplification, the Japanese do innovate, and their edge over the rest of the world is their attention to detail. They do best in an industry of manufacturing products of bespoke design, without standards links to many other things outside the parameters of the product, and innovate within the rules of the game.

However, I'm fully convinced that nobody can make a platform besides the Americans, other nations' language capabilities, human resources, and most importantly, sales capability, are insufficiently well developed anywhere else in the world.

In short, ONLY the Americans can create GLOBAL platforms.

But GM, Ford and Daimlerchrysler will not make the platforms. They are too old school. A new force will have to arise, but it will be very unlikely looking at the state of the industry and the current American business attitude of short-term gain at the expense of long term planning.

So possibly Japan will forever be the world's best and most cost effective car manufacturer.

More discussion here:
http://forum.carma.com.sg/showthread.php?p=17539415#post17539415