Creative declares ‘war’ on Apple iPod, shoots for 40% market share of MP3 players

“War has been declared. Not the conventional type with the troops, tanks, and smart bombs, but an entertainment war for the $3 billion global music player business. Creative Technology has decided to move in against the giant Apple in an attempt to capture a 40% market share for MP3 music players. In the three years since the iPod’s launch, it has become the worldwide player of choice, claiming about 85% of the market, so to call this an uphill fight is something of an understatement,” Kelvin Taylor writes for The Motley Fool.

“Creative’s plan of attack is a two-pronged approach. First, launch a wave of spending to the tune of $100 million to market its players such as the Zen Touch. This is very iPod-like in appearance, and has a 24-hour battery life, twice that of the best iPod. One hang-up for the Zen Touch — other than there isn’t any camouflage style available — is that tracks from iTunes won’t easily transfer. The files have to be converted into MP3 files first, but tunes from RealNetworks’ music store, Harmony, can be easily transferred to the player,” Taylor writes.

Taylor continues, “Secondly, the company has recruited an ally to help gain some advantage: Microsoft. Creative was one of the first hardware manufacturers to release a combination video/music player based on Microsoft’s Portable Media Center concept earlier this year. And while so far reaction hasn’t been great, many consider portable video players to be an important product category going forward.”

“If recent history is any guide, the battle to win over iPod users has yet to be very successful. Various interlopers have taken on Apple with lower price points before, and failed largely because the iPod design is the most compelling. The big A has so far eschewed flash-based players, but rumors are swirling that that might change in 2005 at the MacWorld trade show in January. Speculation has leaked that CEO Steve Jobs will unveil an inexpensive Apple-branded flash music player,” Taylor writes. “Ultimately the functionality, features, and price will determine tomorrow’s must-have device. Having those three weapons ready to launch will be key if Creative wants to win the war for digital music players.”

Full article here.

MacDailyNews Take: Creative wants to capture a 40% market share for MP3 music players? It’s good to have goals, we guess. Unfortunately, unrealistic goals result in rapidly losing motivation. Creative faces an uphill fight all right, too bad for them that “hill” is named “Everest” and already has a pirate flag flying atop its peak.

Related MacDailyNews articles:
Forbes writer tries to sell Creative Zen Touch to ‘Apple iPod Resisters’ – December 20, 2004

26 Comments

  1. BuyMusic.bomb
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    Background-Funeral Music of choice

  2. Oh, what a good laugh…

    $100 million? Good money after bad… The only ones that will benefit are the marketing folks that give their piece of this large pie.

    Is Creative private or public?

  3. Well, considering Creative recently sold off their profitable software business to focus on portable digital music players, I guess it’s not entirely apt to say: “Creative is Toast” ” width=”19″ height=”19″ alt=”LOL” style=”border:0;” />

    ..but I predict they soon will be, regardless.

  4. Well, I think Creative is spending its $100 Million quite well. In addition to the Betsy Schiffman article referenced earlier on MDN, I have now heard two tech features on the radio extolling the virtues of the Rio 5 gB player, whatever it is called. The reports were very positive (without dissing the iPod), hit all the high points, and were obviously written mainly by Creative Marketing.

    I am confident that Apple has some promotional material in the wings for the iPod (isn’t there some sort of event coming up in the New Year?), but they do need to keep their nose to the Marketing grindstone to make sure that others get no traction.

    As has been mentioned before in this forum, it wouldn’t hurt for some real information ads from Apple instead of feel good pap.

    Mike

  5. Wow, can we get off this “We sell the most now, so we always will sell the most” kick? It seems to be the only way people look at this. iPod is hip now…It won’t be forever. A lot of my friends have alternative players and they like them! Once another company finds a good design, they’ll slash the price and suddenly Apple’s got problems…

    Apple can’t ride the wings of the iPod for the rest of its life. IBM built the PC business and it just sold it off… Anything can happen.

  6. Wow.. Creative is smart… Since Apple doesn’t have a flash player they can talk about units all they want..

    Let’s talk about revenues..

    Let’s talk about profits…

    When Apple has a flash player that’s cheap, we’ll discuss the units.. until then.. let’s just say thing..

    HD marketshare 92%..

    Creative won’t get anywhere near that unless it first takes a few of the Microsoft Family members out.. Rio.. Virgin.. help me out here guys…who else is there? Samsung!?

    Yeah.. the slash and burn policy where Creative eats 100 million in price cuts does wonders..

    Isn’t that to prop up demand? Well.. of course it is…

    Or as Michael Dell would say “provide value”

    Wow.. their spending to keep up with Apple is ingenious..

    Shareholders get on those phones.. sell sell sell…

  7. Well, considering Creative recently sold off their profitable software business to focus on portable digital music players, I guess it’s not entirely apt to say: “Creative is Toast”

    ..but I predict they soon will be, regardless.

    confused.. I think you’re referring to Roxio/Napster..(?)

    Anon.. if you think Apple is resting on its laurels you haven’t been.. er.. conscious for the past six months.. 200 million songs sold.. and with a sweet HP deal.. selling about a million iPods a month..

    HINT: the company that is slashing prices is the one not selling..

    Not only is the iPod hip.. with the iTunes/iPod marriage.. regarding AAC.. Apple’s also, like it or not, locking in customers.. so.. in a way there is a certain customer 2, 3 years down the line..

    How Monopolistic of them ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

    Like I said.. SJ is the benevolent dictator

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