Transitions in the storage and software product delivery markets are tumbling over one another at such a rate as to create total chaos. Companies such as RR Donnelley & Sons Co are having to scale back their software duplication and manual productio n businesses – it just announced 1,400 lay-offs – because software vendors are delivering both code and manuals on Compact Disk, games are moving from cartridges to CD-ROM, yet sales of most multimedia CD-ROM titles are so poor that prices are being slashed. Caught up in the middle of all this are the makers of CD-ROM drives, who are also suffering from a glut in the market. Creative Technology Ltd, Singapore has pulled out of the business and warns of a significant loss for its fiscal fourth quarter. The immediate cost of closing the drive manufacturing operations is a $10m charge.of its CD-ROM manufacturing operations and inventory adjustment charges.Creative is jointly designing 12-times speed CD-ROM drives and other optical devices w ith Samsung Electronics Co, which will likely now be the sole source of whatever is designed. Creative says it will not cut any of its 3,000 permanent employees in Singapore and Malaysia as a result of closing the CD-ROM unit.
