How beleaguered Creative got stomped by Apple Computer

“At the launch of a new Creative Technology MP3 player last month, Singapore’s most famous technopreneur Sim Wong Hoo hurled the gadget at a wall,” Alfred Siew reports for The Straits Times. “It was his way of demonstrating how rugged the Zen V player was. A Creative employee had earlier dropped it from standing height but Mr Sim obviously felt that was not dramatic enough.”

“So he took the player and flung it across the room. The Zen V player fell to the ground with nary a crack,” Siew reports. “For people who have been following Creative’s attempts in trying to unseat Apple Computer from its dominant position in the MP3 player market, Mr Sim’s action was also an indirect attack on his competitor’s product.”

MacDailyNews Take: We direct you to the following article, “Apple iPod nano takes a beating and keeps on beating” (September 12, 2005) in which Ars Techinica runs over an iPod nano with a car (twice) and throws it 40 feet into the air to land on pavement in order to see how sturdily it is constructed.

Siew continues, “In May, it sued Apple in California, alleging patent infringement of its navigation technology and method of organising music on a player. Creative also complained to the United States International Trade Commission, seeking to ban imports of Apple iPods, which are mostly made in China, to the US. Apple promptly responded with a lawsuit in Wisconsin, alleging that Creative infringed not one but four of its patents for the display and interface of music devices. It also filed another suit in Texas, claiming three of its patents were infringed.”

“In a clear tit-for-tat move, Apple also asked the trade commission to halt US imports of Creative’s MP3 players,’ Siew reports. “…Apple and Creative declined to comment, although both sides said in a joint report to the judge in Wisconsin on Monday that they were in talks about licensing and were ‘open’ to an agreement that would end their litigation battles.”

“Legal experts interviewed said a speedy resolution will benefit both parties because by the time the suits are resolved in court, the patents that the two companies are fighting over may not matter much, given how fast MP3 player technology changes,” Siew reports. “Some lawyers have questioned Creative’s decision to launch expensive lawsuits against a rival with deep pockets. Apple turned in a US$410 million profit in the quarter ending April 1, shipping 8.5 million iPods worldwide. In contrast, Creative racked up a loss of US$114.3 million for the quarter ended March 31, after a plunge in MP3 player prices forced it to write down the value of its inventory.”

Siew reports, “Things could have turned out very differently. Instead of slugging out in the courts, the two companies could have been business partners… Today, Apple has cornered 77 per cent of the MP3 market in the US, leaving Creative, Samsung, Sony and a motley group of Korean, Taiwanese and Chinese companies to fight over the remaining share.”

Full article with history and what Creative could try next here.
Sim Wong Hoo is likely going to be throwing things for a very different reason if and when his former partner (headed by chair-throwing Steve Ballmer) releases the latest rumored Microsoft ‘iPod killer.’ There really ought to be some sort of “Inanimate Object Tossing” tournament for CEOs of Apple’s iPod+iTunes roadkill. Everybody deserves a chance to win at something besides bombastic MP3 player war declarations and the usual illegal monopoly leveraging.

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11 Comments

  1. Creative. Just another technology company that knows how to make geeky techno-products but has no clue how to design them for the general consumer and no idea how to market them at all. They’re still bitter about the Nomad being knocked out of the #1 position when the iPod came along, and can’t let go of the fantasy that they’ll be back there someday. This is a company heading for dramatic failure unless they can accept their position in the pecking order.

    The amazing incompetence of Apple’s “competition” in the music player market just proves how difficult (impossible?) it is for a company to re-invent itself. These electronics companies are used to making products for nerds who are willing to learn how to use them. They don’t know how to make products for everybody, or how to market them. If they haven’t learned how by now, I doubt they ever will.

    My guess is that Apple’s biggest competition will come from a company that doesn’t exist yet, most likely formed by young mavericks currently working at Apple.

  2. QC testing for both Apple and Creative will be done by none other than Steve Ballmer himself. Each iPod and Creative player will be personally thrown across his office and speed tested by radar. Anything thrown under 90Mph will be tested again. Second phase of QC will be to have a chair thrown on each one and then a third phase monkey-dancing routine done on top of each and every one again (monkey dancing QC test phase will be done off shore by professionally trained Sumo wrestlers taught the dance by Ballmer himself). Anything that fails will be sold refurbished, but main contain sweat stains that have permanently etched themselves into the surface of the players. Ballmer is expected to make the anouncement of his departure from MS and the details of his new direction by week’s end.

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