New CEO has to get Creative, update firm's products amid rapid tech advances
New CEO has to get Creative, update firm's products amid rapid tech advances
SINGAPORE - All eyes will be on Creative Technology's new chief executive to drive innovation at the home-grown electronics firm.
Mr Freddy Sim, 67, the younger brother of the company's late founder Sim Wong Hoo, is taking the helm at the iconic home-grown brand amid widening losses at the firm, rapid technological advancements and stiff competition.
Aletheia Capital's head of consumer and internet Nirgunan Tiruchelvam said Mr Sim will need to come up with more relevant and innovative products to help revive the company, noting that it could do more in terms of advanced voice assistant integration and other relevant businesses.
'The R&D spend is very small compared to what the competitors in the US are spending,' he added.
Creative, in its May 16 filing announcing Mr Sim's appointment, noted his experience as an entrepreneur in consumer electronics and technology for over 40 years.
Mr Tiruchelvam said: 'As such, he may be open to the challenges that Creative needs to grapple with, which is to adapt their products to face the evolving technology.'
Mr Sim, who like his brother will be drawing a nominal monthly salary of $1, said in a statement by the company that Creative is known as the flag bearer for innovation in the technology industry and that the new senior management team have 're-strategised and refocused on our core DNA of innovation'.
The company has said it will reveal more on its next strategic steps in the coming months.
Mr Sim's appointment follows a global search for a replacement for its CEO Song Siow Hui, a Creative veteran who took over as CEO when Mr Sim Wong Hoo passed away in January 2023. Mr Song retired in February. Executive chairman Tan Jok Tin was the interim CEO.
Creative declined a request for an interview at this point, saying that it is in the midst of restructuring.
Creative, known for products like the Sound Blaster sound cards under the leadership of Mr Sim Wong Hoo, has faced challenges in recent years.
The company has struggled to keep pace with rapid technological advancements and shifting consumer preferences, leading to a diminished market presence, Dr David Leong, CEO of human resources consulting firm PeopleWorldwide, said in a Facebook post on March 18.
In March, The Straits Times reported that the company retrenched about 40 staff, or 14 per cent of its workforce, as part of restructuring efforts to adapt to evolving market conditions.
Large tech firms such as Microsoft, Meta and Amazon have also cut thousands of jobs, attributing the layoffs to economic challenges and the swift adoption of AI technologies as key drivers behind the downsizing.
For the first six months of its fiscal year ended Dec 31, 2024, Creative's net loss widened to US$6.1 million (S$7.9 million) from US$4.1 million from the same period a year earlier. This was despite higher net sales of US$37.4 million, an 18 per cent increase from US$31.8 million a year ago, from selling new audio products such as the Super X-Fi earbuds and headphones.
In its earnings report, the firm warned of uncertainties posed by the import tariffs announced by the Trump administration on certain countries and potential retaliatory measures from these countries as such moves could heighten inflationary pressures and impact consumer demand.
Creative's stock has fallen nearly 23 per cent this year and close to 60 per cent in the past five years.
Mr Tiruchelvam said investors are looking for more evidence of potential value creation given the challenging environment ahead.
However, Creative said it expects its new products including speaker products such as Pebble Nova and Sound Blaster GS5, as well as audio products such as Sound Blaster G8, to drive revenue growth in the second half of 2025.
Mr Sim Wong Hoo, one of Singapore's most famous tech entrepreneurs, founded Creative in 1981 and grew it substantially in the 1990s. Launched in 1989, its Sound Blaster sound cards, which allowed PCs to generate quality sound, were a success and the firm went on to sell more than 400 million units over the years.
Creative became the first Singapore company to be listed on the Nasdaq stock exchange in 1992. But it delisted from Nasdaq in 2007, citing low trading volume.
In 2006, Creative won a US$100 million settlement against Apple for patent infringements over the iPod. Creative had launched its Nomad MP3 player in 1999, two years before Apple unveiled the iPod.
It later also rolled out other music players such as the Nomad Jukebox Zen, which doubled up as a portable storage device for other media like photos and videos. However, its products ultimately lost out as Apple's music player gained popularity.
Singapore-listed shares of Creative Technology were up $0.005 at $0.88 as at 4pm on May 20.
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