“Creative Technology Ltd., maker of Nomad and Zen MP3 players, reported a 95 percent slump in quarterly profit on Thursday as it struggled in a fiercely competitive market dominated by Apple’s iPod,” Jennifer Tan and Sebastian Tong report for Reuters. “Singapore-based Creative said the company was focused on remaining profitable this fiscal year ending June and reducing costs. It would also cut inventory levels further and grow sales of its higher-margin products in the coming quarters… Personal digital entertainment products such as MP3 players account for 68 percent of Creative’s sales.”
“While Creative struggles, Apple continues to shine. Earlier this month, Apple said strong demand for iPods helped fuel a 63 percent jump in revenue to a record US$5.7 billion during the holiday quarter compared with a year earlier, which was near the high end of Wall Street forecasts,” Tan and Tong report. “The company sold 14 million iPod music and video players during the holiday quarter, totalling 42 million to date. Creative is expected to post net profit of $1.9 million for the year ending June 2006, a survey of five analysts by Reuters Estimates showed. That compares with $600,000 net profit in the previous fiscal year, which included an investment gain and a one-off charge.”
Full article here.
Apple likely spent more on mousepads for employees over the last two fiscal years than Derivative earned in total net profits. The fat lady’s singing Zencast is almost over. Mr. Hoo had better start focusing on finding a court that’ll enforce their U.S. music player user interface “Zen patent” or beg Steve Jobs for a cross-licensing agreement post-haste.
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Get Creative about telling your employees that the Fat Lady is clearing her throat.
I relize MacDailyNews likes to belittle any company other than Apple, but while Creative is not in the same league as Apple in the digital music player catagory, It is nonetheless still profitable.
Lot’s of iPod bashing and far too much Creative Praise going on here. Please help set the record straight. Post a review.
http://www.amazon.com/gp/product/B000CS7U1C/sr=1-1/qid=1138257621/ref=pd_bbs_1/002-7682307-8796846?_encoding=UTF8
Come onnnn . . . de fat lady HAS sung. And more and more she’s looking an awful lot like Janet Jackson. Have you seen that bitch lately?:
Yeh-heh-hehessssss . . . that picture kind of reminds me of Sim Wong Hoo’s mess of a comapny — all fat and lazy and no longer a “creative” force of any kind.
Hey, I keed, I KEED de corpulent and delusional.
ha ha ha
good riddance to won hung lo and his lame ipod ripoffs
Creative is not in the same league as Apple?
Creative is not even in the same galaxy as Apple.
Swirling and swirling around the bowl…which one goes down first, Napster or Creative? Can RealPlayer be far behind?
I’d be worried about a legal battle now, especially since how a lot of these have been going done, ie: Blackberry.
Creative is not a bad company and many of their products are quite well designed and ounce for ounce just as qualified as the iPod family to produce a pleasant user experience. The one thing that creative missed out on was a distribution service. That is where Creative, Dell, HP and a few other companies missed out. They did not have excellent ditribution of content or truly promote in a comprehensive way what could be played on / with their products. Apple did it with a bottom up approach. First they developed excellent hardware, then tweeked the design and software to make it simple and effective. They created a content distribution center where the prices were low, unified and relatively easy to access. The next thing they did was promote like crazy. I have seen at least 10 iPod ads in the last 3 years and have to date never seen a Mac ad (maybe its because I live in the Greater China Area). Sony could have been better positioned as Apple is if they had combined their marketing strengths with their content distribution and manufacturing processes to streamline an excellent product (They did it with the playstation to beat Nintendo, Sega, NeoGeo, and Atari, but did not consider the same approach with mp3 players – strange!?!?!?). Furthermore, they would rather rent songs instead of let a user just own them. They were not looking to the future and frankly were doing things the old way, the way a manufacturer would do things. Apple’s approach has been innovative and now many companies have to play catch up. I think the Creative brands have promise but what will likely happen is that Sony, Dell, Creative and a few other content providers with eventually band together with Microsoft and promote an integrated iTunes Music store clone with Microsoft the software developer, Sony BMG the content provider and Creative the hardware maker. I am not talking about the deal Microsoft made with MTV or the Urge software or whatever they consideer that thing to be. I am talking about a new venture with equal shares among the aformentioned companies. If they did it right, they could easily commendeer 25% market share from Apple and get an iTunes clone music store to countries like China, Philipines, Indonesia, India, South Korea, Taiwan, Macau, Thailand, and basically all of Asia which represents about 60% of the global population to buy their integrated products. Yes Apple has North America and Europe and baiscally the G8 nations, but Sony, Microsoft, Creative and a few other smart companies could take Africa, Asia, South America and the Pacific islands. And for those of you who don’t think the ‘3rd’ world has desposable income to purchase things like the iPod or music from a download service, please think again. South Africa, Nigeria, Argentina, Brazil, India, China, Indonesia and a few other countries already have local iTunes clone stores for distributing digital content (I am not talking about limewire or Kazaa or Morpehus). They are very small, pretty much illegal and very unheard of, “BUT” with the right major players, either Apple, or my proposed Sony, Microsoft, Creative combination, could take over legitimitize them and make a lasting impact on the rest of the planet.
Let’s see what happens, I am just speculating, but I am pretty sure about the things I just wrote…
Creative should just stick with sound cards
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When Apple was struggling during the 2001-02 year, I remember the “Apple is profitable” mantra being sung from all sides as the argument against the press and their Apple-is-doomed articles. Creative is still profitable, therefore not beleaguered, and certainly not going out of business any time soon.
Look at Napster is you want to see a beleaguered company. They really are going down the pan.
Some people in this forum tend to be hypocrites. Someone has an a problem with an Apple product, they kill the messenger. When some people have a problem with another company’s product, the company is attacked as being makers of no good cheap products.
I say just let the product speak for itself.
Why anyone would be singing for Creative is beyond me.
Like Microsoft they have pissed away all their early leads in a variety of industries and technologies.
When they were the leader in Sound Cards for PCs, they were thinking thoughts that were original and creative but the truth eventually came out. They could not write drivers that were worth a crap and slowly other companies integrated sound hardware with drivers that worked reliably and simply.
Look at what Creative has done with some of their other acquisitions, Ensoniq, Emu and Cambridge Speaker Works.
Ensoniq, gone!
Emu, just pimping the name and heritage of this once great synth company.
Cambridge, several dozen little cheap speakers, yea they sound ok but none are outstanding or innovative.
iPod clones? Why bother. It would make about as much sense to launch the “all new Creative OS” the new real alternative to Microsoft.
They just don’t get it. The company is called Creative but they’re not creative, and now they’re just a company hoping for something to come along that will bail them out. Too bad they can’t do anything original.
Anyone else remember the Creative sound card for the Mac? They sure stuck it to a lot of poor Mac users who were looking for an innovative high-performance sound card with integrated midi and a reasonable price. It could have matured into a good product if Creative had stuck with it but instead, they had horrible drivers, poor noise floor (despite their marketing), zero product support and I’m not sure the midi portion ever worked. Finally they just jumped ship on the product and hung the users with worthless crap, lost money and gobs of wasted time.
But I’m not bitter.
Yes I am. Hey Creative! I’m holding up my middle finger and pointing it at you. Soon you’ll be selling your patent portfolio and technology just to keep the lights on. Die a painful death soon!
Cheers
If Creative had any balls or a leg to stand on they’d be pursuing the iPod in court like crazy. Imagine the free press they’d get.
I suspect their patent is worthless too.
Their patent has to be worthless. Else as you say they would have done something about it by now.
Creative – the most ‘un-creative’ company out there.
Says it all really.
Buy iPod! Buy American!
Oh It’s ok for Apple to steal from a company, but when Microshaft steals from Apple’s “innovations” everybody cries fowl like squealing little piggies.
“Microshaft does this. Microshaft does that. Microshaft is a big evil monster that’s destroying the world” But when Apple has a majority market share it’s great for them to crush other companies into oblivion. I’m not saying that’s bad I just want everyone to realize what page we’re on and not fool ourselves…oh wait I’m talking to Macintel cultists…forget that last part about fooling ourselves becsause no matter what that seems to be what we do best.
Tom Strong said: ‘Buy iPod! Buy American!’
Is this a joke? Admittedly the iPod is designed in the US but all the manufacturing takes place in Asia. No jobs for Americans there!
MW: music – companies without the whole widget (iTunes, ITMS & iPod) had beeter learn to face the music.
please give them a break. we don’t want to be like MS which destroyed every small company tried to compete with them.
and to have a profit is not bad in a very competitive industry.
FUSeek said: ‘when Apple has a majority market share it’s great for them to crush other companies into oblivion.’
Apple may be crushing the competition but it is doing it in a totally un-M$ way. Innovation, marketing, quality, service, content people want are not M$’s way: monoploy abuse, underhanded deals, buying ideas, inferior software, etc. are. There is no way you can equate Apple’s lead and actions in this field with anything M$ has done. The other companies in this market are failing because they can’t see the whole picture and provide a way out of the hole they are in.
MW: values-enough said
I am dissapointed with the MDN Take.
True, Apple produces better and more original products than Creative, but just because they are bigger in size does not make Apple better than Creative.
It is like saying that Apple is rubbish because Microsoft is so big. Every time I see a take like this it makes me ashamed that some people are so hypocritical when Microsoft and Dell people were saying the same thing a few years ago.
Micropple or maybe Appleshaft?
Tom Strong said: ‘Buy iPod! Buy American!’
Is this a joke? Admittedly the iPod is designed in the US but all the manufacturing takes place in Asia. No jobs for Americans there!
and er……… its actually designed by a brit…………….. sorry……..
Apple likely spent more on mousepads for employees over the last two fiscal years than Derivative earned in total net profits.
did i miss the thread where we gave Creative this new name? If not, i think this might be MDN’s greatest take ever. That, folks, is comedy.
Yeah the MDN take is a little off base. The quantity of profits isn’t the story here or how much biger Apple is. The story is that their profits are down during a holiday quarter.
I still don’t feel any sympathy after their deranged leader has vowed to crush Apple. I think this guy must be related somehow to the North Korean leader.
And I agree with cptnkirk, Apple is totally doing this different than MS would have. There is no comparison.
… and nearly half of American wealth is based on patents and inventions from Scotsmen.
To be serious though when one has sufferred so much contempt at the hands of arrogant, gloating, ignorant, mindless sheep for so many years I can forgive some breast beating from the long suffering. After all Creative may be a small company but like so many others they simply dine on scraps from the Microsoft table with no regards to the bigger picture. They, and all the other wannabes could have got together and formulated their own DRM structure run by an open governing body and/or worked with the MPEG gropu to offer it with their codecs but instead they sold out to the MS dollar, not giving a damn about fairness and consumer choice. Live by the sword die by the sword, and I have no sympathy for them. When an independent and/or representative body does offer DRM that can work on AAC or/and WMA files and available to anyone who wants to use them then I will support that movement, if Apple refuses to play ball with them. Until then the Creatives off this world deserve nothing but contempt especially when they boast about how they intend to crush the particular opposition that I do support.
The problem for all these outfits like Creative is that no matter ho w good their hardware is – the weak link will always be the software. Microsoft offer a sucky set of solutions and none of them did what apple did and made something good – iTunes. It’s not their fault but they’re to blame. Apple don’t just sell the hardware – they sell the product.
Isn’t this the company that Bill Gates verbally endorsed when asked which mp3 player he used??
I played with one at a Brookstone at the mall. It seemed nice, but it was noticeably a brick and had so many features that it wasn’t easy to figure out. That, plus the lack of a true scroll wheel is the answer why we are even here today talking about their demise. The KISS principle is one of the reasons the iPod is so successful. Keep It Simple, Stupid.
pat the ex said said:
Tom Strong said: ‘Buy iPod! Buy American!’
Is this a joke? Admittedly the iPod is designed in the US but all the manufacturing takes place in Asia. No jobs for Americans there!
and er……… its actually designed by a brit…………….. sorry……..
I believe you are wrong on both counts. As to the American jobs, you are quite wrong. Dozens, if not hundreds of jobs in the US in Cupertino are linked to the design, creation and maintenance of the iPod/iTunes engine. The so-called manufacturing, assembly and packaging jobs in Asia are a pittance compared to that.
As for the designer of the iPod, who are you talking about? Certainly not the inventor of the iPod, Tony Fadell. For his bio, see http://en.wikipedia.org/wiki/Tony_Fadell. Perhaps your reference is to Jonathan Ives? I am a huge Ives fan, but it is a fact that the company who hired the US designer and the team of people who developed and built the iPod/iTunes engine, and the designer of its computer products, is a US company.
Dave H said:
When Apple was struggling during the 2001-02 year, I remember the “Apple is profitable” mantra being sung from all sides as the argument against the press and their Apple-is-doomed articles. Creative is still profitable, therefore not beleaguered, and certainly not going out of business any time soon.
Look at Napster is you want to see a beleaguered company. They really are going down the pan.
Agreed on Napster, but c/mon, be serious. $1.9mm is nearly zero in this business when you are trying to sustain what they are attempting to do. Apple’s profitability was orders of magnitude greater and they had enormous assets. Creative does not. The fact that a company nets profit does not make the use of the adjective “beleaguered” inappropriate, when that profit is 95% down on such a small scale.
Moreover, as I remember the arguments against Apple’s demise, they also included references to what it meant to own sdomewhere between 2 and 5 percent of a vast market, of their deep penetration in many verticals, of the quality fo their product, and the fanatacism of their supporters. Perhaps Creative enjoys similar assets, but I haven’t seen it. So, I don’t think this “pot calling the kettle black” analogy works.
Creative has some solid, though not extraordinary, products. I hope they are able to survive, b/c the competition will only strengthen iPod.
February 1, 2006: Creative Technology Ltd. cuts work force by 15%.
Hey Junior (Reg), take a look at Poppycock’s use of paragraphs.
Reginald
I thought your post was interesting and you are on the money in relation to the largest countries in the world not being penetrated by Apple and that it could represent opportunities for MS and its partners.
However I don’t think it is going to happen. The reason why Apple has only bothered with North America/Europe, Japan, and Australia is because 90% or more of the music bought in those countries is actually purchased. The reason why Apple has ignored those very large markets that you mentioned is that most music in those countries is pirated and the governments don’t really enforce piracy laws (this will not change any time soon). MS also knows this and unless they had hardware to sell it doesn’t make sense to get in because you will not make money on a legal music service. People in those countries will not pay .99/track when they can walk to any vendor on the street and buy music for less than .50/track. And let’s not forget that in order to pay for music providers will need to work something with cell carriers which would even be more complex because credit card penetration is those countries is very low. If such ventures could be profitable Apple would already have an iTunes store in Mexico and Brazil (~300M people). The only way consumers in those territories would use an iTunes or MS Music site is if the provider would be willing to take a loss. Apple may be willing to do it to sell iPods. MS does’t sell music hardware (but they will down the road) so there is no way they can make money at this time
it wouldn’t be so bad, except that the nasty little wanker running “creative” feels it necessary to bloat up his little chest, then announce how he’s going to “kill” the iPod. as one of the earlier posters wrote, “live by the sword….” at any rate, it is refreshing not to hear from that nasty little windbag!
Any company that can make such a knockoff of the iPod video and actually win best in show for it at CES deserves to go out of business.
How can they be called Creative and copy another company’s product and call it their own?
Poppycock
But it was only when Apple pulled something out of the hat that everything turned round. Creative still has plenty of time to do the same, as long as they stay profitable.
If I were working at Creative I would take a bit of Jobsian advice, state that the MP3 player is dead, and start looking for the next big thing.
Reginald, it was hard to read your post with nary a line break.
I had a question though, what is the “Greater China Area”? Is this a formalized term, thus the need for capitalization? Do the other countries under this umbrella feel their sovereignty threatened? Isn’t this term somewhat hegemonistic? Anyway, it makes me think of some of the terms from WW2 and Germany and Japan’s imperial ambitions.
From: Poppycock
Jan 26, 06 – 09:22 am
pat the ex said said:
Tom Strong said: ‘Buy iPod! Buy American!’
Is this a joke? Admittedly the iPod is designed in the US but all the manufacturing takes place in Asia. No jobs for Americans there!
and er……… its actually designed by a brit…………….. sorry……..
I believe you are wrong on both counts. As to the American jobs, you are quite wrong. Dozens, if not hundreds of jobs in the US in Cupertino are linked to the design, creation and maintenance of the iPod/iTunes engine. The so-called manufacturing, assembly and packaging jobs in Asia are a pittance compared to that.
As for the designer of the iPod, who are you talking about? Certainly not the inventor of the iPod, Tony Fadell. For his bio, see http://en.wikipedia.org/wiki/Tony_Fadell} Perhaps your reference is to Jonathan Ives? I am a huge Ives fan, but it is a fact that the company who hired the US designer and the team of people who developed and built the iPod/iTunes engine, and the designer of its computer products, is a US company.
—————————–
hmmmmmm well heading up a team and designing are 2 different things, general consensus is that ives is the principal designer, and perhaps more important is to remember that if it was not for Ives and the orginal iMac apple may not have survived long enough to produce the iPod; lest we forget it was the iMac that really saved Apple and did it quite a few years before the iPod even existed
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2005/11/19/nive19.xml
http://observer.guardian.co.uk/comment/story/0,6903,1111276,00.html
but enough of this, i meant it only as a gentle dig………
oh PS
http://en.wikipedia.org/wiki/Jonathan_Ive