Creative says they will continue making new Zen MP3 player models

“Like the proverbial cat that swallowed the canary, Creative Technology Chief Executive Sim Wong Hoo is smiling, and nobody’s quite sure why,” Rachel Rosmarin reports for Forbes.

“‘Creative thought they were going to get a piece of all iPods sold for the foreseeable future—that would cross the multi-billion dollar mark,’ says Rob Enderle, principal analyst at the Enderle Group. ‘And had they been successful, even temporarily, the decline in Apple’s stock would have been catastrophic.’ Instead, Apple can continue making and profiting from the market-leading iPod, and Creative earns the dubious honor of partnering with Apple to make matching accessories, such as speaker systems and head phones. Creative will continue to make and sell new models of its Zen MP3 player, according to a company representative,” Rosmarin reports.

“The Apple ‘Made for iPod’ program is no sweet deal, either. Apple takes an approximately 10% cut of wholesale prices on sales of the peripheral devices, and the market is already crowded,” Rosmarin reports. “Creative is not a major player in the audio player accessory market—especially not in marketing and promoting products for other companies’ devices. Why was Hoo so eager to take the accessories deal instead of more cash?”

Rosmarin reports, “There must be something somebody’s not talking about, says Enderle. ‘I think Apple offered Creative something that gives them a competitive advantage–an incentive–in this space. Nobody has said what that is.’ A Creative representative said the terms of the ‘Made for iPod’ agreement are confidential. If Creative isn’t getting a perk or two out of this settlement, Hoo’s comment describing the deal as ‘amicable,’ would sound strangely docile for the man who once declared an MP3 player war against Apple with a $100 million marketing campaign and called the iPod Shuffle ‘worse than the cheapest Chinese player.'”

Full article here.

[Thanks to MacDailyNews Reader “Clarus” for the heads up.]
Sim Wong Hoo is smiling because he’s a wild and crazy guy, that’s why.

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23 Comments

  1. Apple should license fairplay AAC to creative – that would get the Netherlands and France off it’s back, and strengthen it’s position vs. Microsoft Zune.

    Then maybe hp could license a zen model of their own…

  2. Every time I see Enderle quoted and labeled “principal analyst at the Enderle Group” it makes me want to throw up. Why? Cause he’s the ONLY analyst at the Enderle Group, and I use the term “analyst” very very loosely. He’s also the window washer and chauffeur, cause he’s the only one who works there (we’re not counting his wife who is supposedly also on the payroll – cause my girlfriend is on my payroll too and I know what she does. Hey, no jokes, ok?) When I see a news source quote Enderle it just kills any credibility they may have already had.

  3. “Creative will continue to make and sell new models of its Zen MP3 player, according to a company representative,” Rosmarin reports.

    I think there was a typo: that should have been “Creative will continue to make and NOT sell new models of its Zen MP3 player, according to a company representative.”

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