Analyst: Microsoft could buy Creative Technlogy in bid to compete with Apple iPod

“The share price of Creative Technology, whose MP3 music players compete with Apple Computer’s iPod, rose for a third day yesterday after Microsoft chairman Bill Gates reportedly said that his group would support Creative and other partners,’ Bloomberg reports. “Microsoft was ‘working hard’ to make it easier for Creative and other companies to use Microsoft software for its MP3 players, a Business Times report on July 9 quoted Gates as saying. ‘The iPod has done great marketing and great design,’ Gates was quoted as saying. ‘We have to do something with our partners that’s just better.'”

“Even with yesterday’s gains, Creative’s share price has tumbled 47% this year, compared with an 8,4% rise in the Straits Times index, making it the second-worst performer on the benchmark index,” Bloomberg reports. “Some analysts said the shares may be also gaining on speculation Microsoft might form ventures with Creative or take a stake in it… Analyst Don See of DBS Vickers said it was possible Microsoft could buy Creative.”

Full article here.

MacDailyNews Take: Steve Jobs just has to be laughing his ass off right now.

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Apple shares rocket in heavy early trading – July 14, 2005
Apple smashes street with record revenue, earnings; shipped 6.155 million iPods – July 13, 2005

19 Comments

  1. Wasn’t creative spending $100M on marketing to unseat the iPod? Where did that pipedream go?

    If MS did by CREAF, it would be bad for iPod because MS could sell the units at a loss, just to gain market share, and be fine because of the huge cash and income stream. Apple could use some of the 7.5B in cash to do the same, but in a war of attrition, Apple won’t win against MS.

    Still, as of yesterday’s numbers, Apple holds 82% of the dmp market, CREAF has 5% and the remaining 11% is fragmented among “the rest”.

    my magic word is “over”

  2. The truth is, Microsoft could probably buy Creative (or not) and manage to take over the top music spot. However, they’d do it by resorting to the underhanded business practices that got them where they are, not because they actually have a worthwhile product. Hollow victory if you ask me.

  3. I don’t see how Microsoft could do any better by buying Creative since Microsofts own music download service isn’t doing any better than Creatives. They just don’t get it that people don’t want to rent there music and pay for it over and over every month to use it. iTunes has the market because it is the easiest to use and works on Mac and PC which no other service does period.

    So this suggestion to buy Creative has no merit and is a dumb idea and would be a waste of money on Microsofts part.

  4. In a dream I had last night, I saw something like this happening, only Billy Goates (the name one of the actors had in my dream) was looking for someone to team up with against the horrible onslaught by the MacTel, gobbling up market share like a wolverine after a hunger strike!

    These are interesting times…

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