Creative’s self-declared ‘MP3 player war’ against Apple isn’t going very well

“MP3 player maker Creative Technology failed to outsell Apple’s iPod during the holiday sales season, it emerged today when the company published its financial results for the period. Apple last week said it had sold 4.5 million iPods in the three months to 31 December 2004 more than double the 2 million Creative today admitted it sold during the period, which equates to the second quarter of its FY2005,” Tony Smith reports for The Register. “Clearly, Creative is not winning the war it declared against its rival last November. Back then, Creative chairman and CEO Sim Wong Hoo bullishly said: ‘It’s our target to beat iPod in this quarter.'”

“‘The MP3 war has started and I am the one who has declared war,’ he thundered at the time, adding that the company was on track to sell 3 million MP3 players during the Christmas quarter. He also pledged to spend $100m to out-market Apple. And, in a spirit of ‘if you can’t beat ’em, join ’em’, Hoo is looking to his rival to help boost his own sales. ‘Apple’s entry into the Flash [player] market will create more awareness in the Flash market segment, and we are well positioned to become a big beneficiary of this expanding market,’ he said today,” Smith reports. Full article here.

“Sim Wong Hoo said: ‘I believe we are extremely well positioned against the flash products and pricing that were recently announced by Apple, as we have superior features and broad product lines that span the entire category. I also believe that Apple’s entry into the flash market will create more awareness in the flash market segment, and we are well positioned to become a big beneficiary of this expanding market. We are going to continue our aggressive marketing and improve our already strong market position, and we are targeting to grow revenue substantially in the third quarter on a year-over-year basis by 50 per cent,'” Macworld UK reports. “However, describing the increasingly competitive market for such devices, DBS Vickers Securities analyst Don See told Reuters: ‘We do not believe Creative has the edge or resources to maintain its market share.'” Full article here.

MacDailyNews Take: Sim Wong Hoo, known affectionately around here as the “Edward John Smith of Creative,” really needs to take a look at how many of his “2 million” (un)Creative units were returned by those who actually asked well-meaning (but electronically illiterate) Grandma Edith specifically for Apple iPods and iPod minis. “Thanks Grammy Edie for the digital lump of coal!” We’d like to see the number of Creative units returned the week after Christmas. We bet it’s pretty high. Creative is an ant that’s “extremely well positioned” right in front of Apple’s steamroller.

Related MacDailyNews articles:
Creative CEO: Apple iPod shuffle ‘a big let-down, worse than the cheapest Chinese player’ – January 12, 2005
Creative declares ‘war’ on Apple iPod, shoots for 40% market share of MP3 players – December 21, 2004
Creative Technology declares ‘MP3 War’ against market-dominating Apple iPod – November 17, 2004
Mossberg: Dell, Rio, Creative ‘iPod mini killers’ lag badly behind Apple iPod mini – October 27, 2004
Creative pushes to become ‘Pepsi’ to Apple’s ‘Coke’ in digital music player market – August 07, 2004

21 Comments

  1. “MP3 player maker Creative Technology failed to outsell Apple’s iPod during the holiday sales season… Clearly, Creative is not winning the war it declared against its rival last November.”

    Yeah, no $h!t.

    Not only that, but things are only going to get worse for Creative and iRiver now that Apple has release the iPod shuffle.

    Brought to you by the word, ‘fear’. As in, “Is that fear I smell, or did Creative and iRiver soil their shorts when Apple announced the iPod shuffle??”

  2. Actually, 2 million units compared to Apple’s 4.5 doesn’t sound to bad.
    But how many of those were cheaper Flash players? Apple has now entered that market and will sell loads of “Shuffles” …. while still selling the other iPod flavours.

    The gulf between the respective sales figures will only deepen in this quarter.

  3. I keep hearing the “how many Creative players were returned after Christmas” thing and it’s tiring, arrogant, and self-centered.

    You know, >90% of the PC market ISN’T Apple’s. Perhaps there a quite a few people who might actually enjoy their Creative players? Some of the non-iPod players actually have features that are desirable that Apple hasn’t included. Better color screens, longer battery life, etc.

    It’s this kind of poo-pooing of other products in the market that causes complacency (ie Windows) once market share is overwhelming. Frankly, I’d encourage other players to get better and challenge Apple, it’ll make the iPod experience better.

  4. Sounds like Bagdad Bob whistling past the graveyard.

    However, we Mac fans need to remember that it was blinding pride in the superiority of the Mac platform, the idea that no one could catch it because it was so good, that caused the steady erosion of the Mac market. I would rather see a high state of vigilance and pro-active business moves, ala the Shuffle, that keeps Apple ahead.

    I am reminded when Windows 95 came out, which occured as Apple’s internal problems were creating a death-spiral for the company, the word in the Mac community in regard to W95 was “Been there – done that” — a bit like Creative’s Sim Wong Hoo brushing off the impending shadow looming over him when he talked about the Shuffle being so three years ago.

    When I detect MDN’s smug superiority-is-us take on today’s iPod and OSX, we need to be careful not to put on the blinders that cause us to repeat the past.

  5. In that price range, it’s only about price. As we have seen with the Mac vs Windoze PC’s, features and quality and usability don’t matter at all. Just the price tag. One of my employees (who has an iPod mini that I bought her for Christmas last year) bought her daughter an MP3 player this year. She bought her a no name flash player for $149 because she didn’t want to spend the $249 for a mini. Well, the no name pales in comparison to the mini and now resides in a drawer. Now she is going to get her the iPod flash that came out right after Christmas. Well, let’s see $149 + $99 = about the same price as a mini to begin with. But, in her mind, she was frugal.

  6. Not that there were many iPod sales after Dec 25 (since no one had anymore), but Apple’s 4.5m were sold between Sep 26 and Dec 25, not Dec 31 as reported by The Register.

    Apple shifted their quarters to have 13 weeks and not just line up with the end of the month.

  7. Pat is right.

    I was at CES. I looked at countless devices, literally more than I could count that were as useful as the iPod, and they all had one thing in common. They were part of Microsoft’s “Plays Anywhere” standard. They were playing video, music, still images, you name it. Content from one would play on another, no problem, and not an iPod in the mix.

    There is competition coming, and Apple needs to stay on her toes with compelling innovation, and not just good enough but vastly superior technology. When I read the crap from the so called IT bosses who basically feel that Apple doesn’t exist, I know that things really aren’t as good as the seem here on MDN.

    Apple’s Xserve and Xserve RAID are fantastic products that a real IT boss should know about and should consider using. Yet those guys were talking about interoperability problems, showing that the perception that Macs and PCs don’t get along is still prevelant.

    More needs to be done to educate people. Right now, the only people who know are us “fanboys.”

  8. Creative Technology sold 2 million MP3 players? That’s a nice, round number… probably rounded UP. If they had sold 2,000,001 players they would have said,”we sold OVER 2 million players.”

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