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2
CREATIVE TECHNOLOGY LTD AND ITS SUBSIDIARIES
CHAIRMAN’S MESSAGE
Dear Shareholders,
In scal 2014, we have continued with introducing new products in the key product categories, and saw the successful launch
of some new exciting products in the latter part of the scal year, which I will cover in greater length below. However, revenue
contributions from these products during the year were not signicant enough to offset the decline in revenues from existing
products resulting from the challenging market conditions. The difcult and uncertain market conditions for the company’s
products continued to adversely affect product sales and the nancial performance of the Group.
Sales for scal year 2014 were US$116 million compared to US$165 million for scal year 2013. Gross prot as a percentage
of sales was 26% in scal 2014 compared to 33% in scal 2013. Net loss for scal 2014 was US$22 million, compared to a
net prot of US$17 million in scal 2013. Sales and gross prot for scal 2013 included a US$20 million licensing income
received for the licensing of certain technologies relating to high performance GPU technology. Net results for the Group in
scal 2013 also included a US$27 million gain on the divestment of a subsidiary. Excluding these one-time items in scal
2013, while sales were lower in scal 2014, operating and net results for the Group had improved slightly due to higher gross
prot margin and a reduction in operating expenses. Further highlights of the Group’s nancial performance are detailed in
the “Financial Highlights and Review” section of the annual report.
During the year, despite the very challenging market conditions, we continued to push forward with ongoing research and
development in key product categories that are strategic to our business – placing a strong focus on the core audio technology
behind the Sound Blaster brand and the applications of its technology into the Sound Blaster family of products that includes
ultra high performance sound cards and other external audio solutions, innovative wireless sound systems and premium gaming
headsets.
In particular, I would like to highlight a new innovative product from this development effort, the Sound Blaster Roar, which
has enjoyed a very positive reception since its launch and has turned out to be one of our most well received new products in
recent years. It has the potential to be the next Sound Blaster.
The Sound Blaster Roar is a new concept, booklet-size, 5-driver high performance portable Bluetooth wireless speaker that
delivers astoundingly powerful, spacious and precise audio that blows people away the moment they hear it. Sneak previewed
at CES Las Vegas in January, the highly innovative Sound Blaster Roar created tremendous buzz and received positive early
reviews from the media and general public alike. It was a roaring success at its launch in Singapore and has achieved an
impressive sales record of ‘1-unit-sold-per-30-seconds’ at a recent consumer electronics show here. The sleek and compact
speaker garnered an overwhelming number of rave reviews internationally – scoring 5-out-of-5-stars in numerous major
product reviews. At its recent launches in the US, Europe, China and Japan, the reception to the Sound Blaster Roar was just
as overwhelming. More information on this product is provided in the cover pages of this annual report.
Another key potential game changing product is the recently announced Sound Blaster X7.
Audio content for games, music and movies has changed so incredibly in detail and complexity in this day and age, and
consumed on so many platforms – PCs, laptops, smart devices, TVs and game consoles to name a few – and by many different
generations of users. In designing the Sound Blaster X7, our goal is to allow all these users of all these platforms to enjoy the
best audio in the way it is meant to be heard, and in the way they want to hear it. The Sound Blaster X7 combines the full
force of Creative’s renowned 24-bit Sound Blaster processing (up to 192kHz), coupled with a high-resolution 127dB digital-
to-analog converter (DAC), a 100-watt amplier with top-notch audiophile-grade components, and wireless, optical, multi-
platform connectivity to deliver the clearest, and most powerful high-resolution audio experience. Comprising a whole slew
of great features to cover all aspects of usage on different platforms, the Sound Blaster X7 is to-date the most powerful and
technologically advanced audio solution that Creative has ever created. It is the ultimate all-encompassing audiophile upgrade
for serious gamers.
In addition to the Sound Blaster X7, we launched the new ultra high performance and portable Sound Blaster E-Series,
comprising the professional-grade Sound Blaster E5, and the smaller but very powerful Sound Blaster E3 and Sound Blaster E1
audio solutions. The Sound Blaster E5, a 24bit/192kHz high resolution 120dB USB DAC and portable headphone amplier, is
engineered to deliver bit-perfect audio, allowing mobile users of smart phones and tablets, as well as users of PCs and Macs,
to experience audio as the artists intended.