Creative Technology declares ‘MP3 War’ against market-dominating Apple iPod

“Computer audio equipment maker Creative Technology Ltd. said on Wednesday it would spend US$100 million in 2005 to market its MP3 players worldwide, in a bid to wrest share from arch-rival Apple’s popular iPod. ‘The MP3 war has started and I am the one who has declared war,’ Creative Chief Executive Sim Wong Hoo told a media briefing, adding the United States would get the biggest share of the $100 million budget, followed by Europe and Asia,” Reuters reports.

“Singapore-based Creative is fighting to expand its share of the fast-growing digital music market as its computer sound card business declines. ‘I’m planning to spend some serious money — I intend to out-market everyone,’ Sim said at the launch of the company’s new five-gigabyte hard-disk, palm-sized Zen Micro player,” Reuters reports. “Creative is targeting a 40 percent share of the global MP3 market next year, up from 10 percent in the June quarter, Sim said. Apple held a 17 percent share in the June quarter.”

“‘We’re targeting (sales of) more than 1 million MP3 players a month in the current quarter and we are on track. It’s our target to beat iPod in this quarter,’ he added. Creative said it expected the MP3 player market to reach 30 million units in 2004, and more than double to over 60 million units by next year.”

Full article here.

MacDailyNews Take: 1 million players a month will not beat iPod in this quarter. Ain’t gonna happen. Apple’s internal estimates hover around 4 million units, so even if Creative did outperform and sell 1 million per month, they’d still be about a million units short. It’s best not to declare a war you can’t win. And, Creative’s going to “out-market” Apple? Sim Wong Hoo must be crazier than Steve Ballmer at a Microsoft Developer Conference.

42 Comments

  1. Wishful thinking. With wide-spread rumors that Apple will also offer a flash player, Creative will need more then $100 million in advertising. Apple will certainly introduce new iPod models across the board at MWSF, in addition to the new ipodflash. I believe Apple is spending just as much in their iPod campaign.

  2. This will only help Apple. As Creative spends their millions to get people aware of MP3 players and anyone planning on buying one for the first time compares the two and asks friends who already have taken the plunge with an iPod which is best. Even if Creative increases their sales, their advertising will just end up increasing iPod sales even more.

  3. “I’m planning to spend some serious money — I intend to out-market everyone,” Sim said at the launch of the company’s new five-gigabyte hard-disk, palm-sized Zen Micro player.

    “The MP3 war has started and I am the one who has declared war,” Creative Chief Executive Sim Wong Hoo told a media briefing

    Would rather see rather than hear first. This approach is going to fail Cratives big time.

    Sim Wong Hoo should understand that money isn’t everything in this game.

  4. little late…iPod is synonymous with mp3 player like Xerox is to copies.

    I work for HP retail division and people come in and ask for iPod thinking all mp3 players are iPods. They end up buying an iPod anyway.

  5. No brainer…

    1. Walk into a Best buy and ask the sales person to do a live demo how to download music from a website and put it on an MP3 player. First, they won’t/can’t because they are not set up for a live demo. Second, you’ll get a huge sequence of confusing and impossible to remember click-on-this-then-go-here-click-on-that.

    2. In an Apple store, the sales people will actually have you download a song from iTMS, using Apple’s account, onto one of the store’s iPods. (These people will connect and live demo ANYTHING in the Apple Store!) They did this for my father. Never having touched an iPod, he downloaded one of his favorite songs to the store’s iPod within 3 minutes. Simply, get your song at iTMS then plug in the iPod.

    Only if Creative Technology’s products can be as simple as an iPod, will they have any chance at all.

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