Feeds

Corel pedals through product cycle lows

But will Q2 be any better?

  • alert
  • submit to reddit

Bridging the IT gap between rising business demands and ageing tools

Corel confirmed a bad first quarter yesterday. Revenue was $40.3 million, down from $45.5 million in the year-ago quarter. The loss of $14.6 million compares with $21.1 million a year ago. Corel has however managed to reduce its costs by 22 percent. The head count is 1,515. Corel finds itself in a product cycle low, with new versions of CorelDRAW and WordPerfect Office 2000 scheduled for the end of the current financial quarter, ending 31 May. That suggests the results for Q2 are likely to be bad as well, although there may be some relief as a result of upgrade coupons for the new product versions with the current versions. In the conference call after the results were released, it was said that Corel's sales revenue splits into 60 percent retail, 30 percent licences, and 10 percent OEM. The last quarter saw a significant decline in retail sales as a result. Corel has deferred revenue of $19.5 million compared with $12 million a year earlier. Corel has just enough cash to make it through one more bad quarter, it would appear ($14 million) without any need for borrowing. Corel has slightly improved the market share of its DRAW product, but the graphics market as a whole was down in the quarter. Corporate and OEM sales have marginally increased. Four language versions of WP will be released this quarter(English,French, German and Dutch). The Linux version of WP has been downloaded 900,000 times, according to Michael Cowpland. He added: "The only people who tend to buy Microsoft [Office] are those who don't look at our product." He also noted that Microsoft had put its "monopoly prices" up substantially, restricting personal use and concurrent use, with the result that some Microsoft Office product prices had gone up 220 percent. Corel is bundling WP significantly with Gateway, with new bundling deals in the quarter with Lexmark and CyberDyne. The anticipated US upgrade street prices of WP2000 are: standard version, $99; with speech recognition, $149; and the professional version, $199. These are around 30 percent higher than current prices. Corel shares were languishing on Nasdaq at $2.25 yesterday. It is hard to identify any more bad news and unfortunate product timing, so perhaps the future for Corel will be brighter, and cheer up the disgruntled shareholders. Corel did not put on its usual press conference at CeBIT this year, maybe because the general objective of such events is to spread good news. However, Corel did demonstrate WordPerfect 2000 at CeBIT, with Philips FreeSpeech product for speech recognition rather than Dragon. Philips is stronger in the European market, and offers 16 languages at present, which will increase to 32 and eventually include Chinese and Japanese. However, Dragon-enabled WordPerfect will continue to be available in the North American market. ®

The Power of One Brief: Top reasons to choose HP BladeSystem

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple ran off to IBM
But never fear fanbois, you're still lapping up iPhones, Macs
Nadella: Apps must run on ALL WINDOWS – PCs, slabs and mobes
Phone egg, meet desktop chicken - your mother
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.