Beleaguered Creative shifts promotional efforts from music players to new sound card line

“Creative Technology made lots of noise last November, when it unveiled two new MP3 players that it predicted would help it take 40 percent of the global market this year. But, analysts say, despite spending about $100 million to promote its MuVo and Zen models, the company’s market share is still around 10 percent (compared with Apple’s 70). Creative posted a $31.9 million loss in its most recent quarter, and though it recently won a patent battle with Apple (AAPL) over iPod’s track selection technology, many feel it may be too late to break Apple’s stranglehold. Tellingly, Creative has begun shifting its promotional efforts toward its new line of sound cards,” Elizabeth Esfahani and Georgia Flight write for Business 2.0.

[Note: Creative has just 2.4 per cent of the U.S. flash-based music player market, according to NPD, which is relevant because this is the direction market-dominating Apple appears to be taking the digital music player market, as evidenced by the release of the flash-based iPod nano and the discontinuation of the hard drive-based iPod mini. Creative was recently awarded a patent that may or may not be applicable to Apple’s iPod. See related articles below.]

Full article here.

[UPDATE: 6:22pm ET: Rewrote note to explain mention of Creative’s flash-based market share and clarify patent issue.]

Related articles:
Apple debuts iPod nano, iTunes 5: how are Microsoft, Napster, Real, Creative, Sony feeling today? – September 08, 2005
Creative explores new way to beat Apple iPod: patent litigation – August 30, 2005
Creative plans ‘very vigorous defense’ of iPod navigation patent – August 31, 2005
Beleaguered Creative Technology’s ‘war’ on Apple iPod not faring well – August 15, 2005
Apple’s iPod shine dims beleaguered Creative Technology’s outlook – August 08, 2005
Microsoft not buying stake in Creative Technology – August 02, 2005
Creative CEO Sim Wong Hoo adds fronts to war against Apple iPod – August 01, 2005
Analyst: Microsoft could buy Creative Technlogy in bid to compete with Apple iPod – July 14, 2005
Beleaguered Creative CEO Sim Wong Hoo ‘optimistic’ the company will survive ‘MP3 war’ – July 01, 2005
Beleaguered Creative may have to write off unsold stock as losses loom – June 28, 2005
Creative Tech’s reduced outlook drags on Apple, PortalPlayer, SigmaTel – June 27, 2005
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Apple’s understanding of what really counts makes iPod+iTunes impossible to beat – June 22, 2005
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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
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62 Comments

  1. Creative didn’t win anything with regard to the alleged “patent battle.” They simply obtained a patent on a method of track selection which may, or may not, be infringed by the iPod. This has not been claimed by Creative yet, nor defended by Apple. As there was no fight, there was no battle, and thus they’ve won nothing. They’ve simply “gained” a patent, and not necessarily at Apple’s expense.

    I hate it when journos get their facts skewed like this.

  2. << Creative didn’t win anything with regard to the alleged “patent battle.” They simply obtained a patent on a method of track selection which may, or may not, be infringed by the iPod. This has not been claimed by Creative yet, nor defended by Apple. As there was no fight, there was no battle, and thus they’ve won nothing. They’ve simply “gained” a patent, and not necessarily at Apple’s expense. >>

    Right you are. The worst that will happen from Creative’s patent, is that Apple will buy it, and Creative will exit the player market as part of the deal.

  3. Seriously, who the fsck DOES buy sound cards anymore?

    While I jumped off the sinking Windows ship only about 7 months ago, I had previously been building a new PC, or upgrading my existing one for about 12 years… In that time, ibought every major supported brand of sound card made until about thee or four years ago, when integrated on-board audio finally caught up, and in most cases, easily outdid any add-in card.

    For that matter, since about 2000, I had built about 500 or so computers (for clients) ranging from low-end, basic machnes, to top of the line game-machines and CAD workstations, and not a single one didn’t come with excellent built-in sound.

    Creative is a redneck zombie… dead as a doornail, but too stupid to comprehend the concept.

    MW – certain, as in I am certain of this!

  4. “…despite spending about $100 million to promote its MuVo and Zen models…”

    Has anyone here actually SEEN a Creative commercial? (Magazines don’t count.) No matter how much money Cratering has spent, not (MW) many of us have seen what they got for it.

  5. Tommo and Gregg have it right. Creative didn’t win any “battle” over the patent. They were simply granted a patent, which could just as easily be overturned in the future.

    I guess this is a fine example of the “lazy reporting” that Steve Jobs was talking about in his interviews with the media at Apple Expo Paris.

    I, for one, would like to see Creative bite and try to sue Apple over the patent. It should also sue Apple for using the name “iPod nano.” After losing more than $30 million last quarter, there would be nothing better than for creative to spend another $10-20 million and man-years of effort filing lawsuits that have little chance of winning. And if it happens, watch Apple lawyers flood Creative with hugely expensive discovery requests.

    Yep, that would be fun to watch, as lawyers suck on Creative’s cash flow to buy themselves Ferraris. No need to actually develop great products, the lawyers will save the day!

    Not.

  6. Who buys sound cards? Gamers, audio professionals, people with motherboards that don’t have integrated audio.

    You know – Geeks!

    BTW, great use of beleagured in the headline! It had a nice ring to it.

    Oh wait, that’s my iRokkor…

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