The burning software developer Roxio is spinning of from Adaptec the company that started with the developement of Easy CD Creator, in the scene mostly used by newbies. The company is trying to take a larger part of the market, that is growing because CDR drives are sold with
almost every new computer.
``Roxio has the task of transforming itself into more of a customer-facing company. They are known by high-tech early adopters, but now they're going for a more mainstream audience,'' McNealy said. |
Roxio will be spun off to Adaptec shareholders on May 11 and begins trading on the Nasdaq stock market starting May 14, under the ticker symbol ROXI. Gorog said Roxio's sales rose to nearly $120 million for fiscal 2001, which ended March 31, from $13.3 million in fiscal 1996. In fiscal 2001 it had a pro forma, pretax margin of over 20 percent.
About 60 percent of Roxio's business comes from its partnerships with major PC makers with the remaining 40 percent derived from retail sales. He said a slowdown in PC sales will not severely hurt the company due to increasing recordable CD drive adoption.
``Notwithstanding the PC slowdown, anybody who is buying a computer is still buying one with CD burning software,'' he said. Roxio's business has grown as the blank compact disk market has exploded, and as people have increasingly created their own CDs. Blank compact disk production has soared, with about 4 billion blank CDs shipped in 2000.
Nevertheless, analysts said Roxio needs to expand into video applications to sustain its growth. Gorog said Roxio was poised to expand in the video recording market. ``In the next four to six weeks, we'll be making a big announcement on Roxio's entry into DVD recording,'' said Gorog.
Roxio's recording software is included in Microsoft's Windows Media Player 7 and RealNetworks' RealJukebox, software players which let users play music or view videos on a PC.
Gorog said popular song-swap service Napster, which is currently struggling to comply with a crippling court order, has been a huge driver for Roxio's business this past year. Analysts said Roxio would be best served by aligning itself with major recording companies as usage on Napster dwindles under the weight of court restrictions.
``If MusicNet moves into burning, we would hope to be the commercialized burning solution,'' said Gorog, referring to the MusicNet music subscription joint venture between RealNetworks Inc. and three major music companies, Warner Music EMI Group Plc (quote from Yahoo! UK & Ireland: EMI.L) and Bertelsmann AG's BMG, which is expected to begin testing in late summer or early fall.
Source: Yahoo
