Creative Technology

Creative Technology Ltd., or Creative Labs Pte Ltd., is a Singaporean multinational electronics company mainly dealing with audio technologies and products such as speakers, headphones, sound cards and other digital media. Founded by Sim Wong Hoo, Creative was highly influential in the advancement of PC audio in the 1990s following the introduction of its Sound Blaster card and technologies; the company continues to develop Sound Blaster products including embedding them within partnered mainboard manufacturers and laptops.

The company also has overseas offices in Shanghai, Tokyo, Dublin and the Silicon Valley. Creative Technology has been listed on the Singapore Exchange (SGX) since 1994.

Creative Technology was founded in 1981 by childhood friends and Ngee Ann Polytechnic schoolmates Sim Wong Hoo and Ng Kai Wa. Originally a computer repair shop in Pearl's Centre in Chinatown, the company eventually developed an add-on memory board for the Apple II computer. Later, Creative spent $500,000 developing the Cubic CT, an IBM-compatible PC adapted for the Chinese language and featuring multimedia features like enhanced color graphics and a built-in audio board capable of producing speech and melodies. With lack of demand for multilingual computers and few multimedia software applications available, the Cubic was a commercial failure.

Shifting focus from language to music, Creative developed the Creative Music System, a PC add-on card. Sim established Creative Labs, Inc. in the United States' Silicon Valley and convinced software developers to support the sound card, renamed Game Blaster and marketed by RadioShack's Tandy division. The success of this audio interface led to the development of the standalone Sound Blaster sound card, introduced at the 1989 COMDEX show just as the multimedia PC market, fueled by Intel's 386 CPU and Microsoft Windows 3.0, took off. The success of Sound Blaster helped grow Creative's revenue from US$5.4 million in 1989 to US$658 million in 1994.

In 1993, the year after Creative's initial public offering, in 1992, former Ashton-Tate CEO Ed Esber joined Creative Labs as CEO to assemble a management team to support the company's rapid growth. Esber brought in a team of US executives, including Rich Buchanan (graphics), Gail Pomerantz (marketing), and Rich Sorkin (sound products, and later communications, OEM and business development). This group played key roles in reversing a brutal market share decline caused by intense competition from Media Vision at the high end and Aztech at the low end. Sorkin, in particular, dramatically strengthened the company's brand position through crisp licensing and an aggressive defense of Creative's intellectual property positions while working to shorten product development cycles.

At the same time, Esber and the original founders of the company had differences of opinion on the strategy and positioning of the company. Esber exited in 1995, followed quickly by Buchanan and Pomerantz. Following Esber's departure, Sorkin was promoted to General Manager of Audio and Communication Products and later Executive Vice-president of Business Development and Corporate Investments, before leaving Creative in 1996 to run Elon Musk's first startup and Internet pioneer Zip2.

By 1996, Creative's revenues had peaked at US$1.6 billion. With pioneering investments in VOIP and media streaming, Creative was well-positioned to take advantage of the Internet era, but ventured into the CD-ROM market and was eventually forced to write off nearly US$100 million in inventory when the market collapsed due to a flood of cheaper alternatives.

The firm had maintained a strong foothold in the ISA PC audio market until 14 July 1997 when Aureal Semiconductor entered the soundcard market with their very competitive PCI AU8820 Vortex 3D sound technology. The firm at the time was in development of their own in house PCI audio cards but were finding little success adopting the PCI standard. In January 1998 in order to quickly facilitate a working PCI audio technology, the firm made the acquisition of Ensoniq for US$77 million. On 5 March 1998 the firm sued Aureal with patent infringement claims over a MIDI caching technology held by E-mu Systems. Aureal filed a counterclaim stating the firm was intentionally interfering with its business prospects, had defamed them, commercially disparaged, engaged in unfair competition with intent to slow down Aureals sales, and acted fraudulently. The suit had come only days after Aureal gained a fair market with the AU8820 Vortex1.