Beleaguered Creative reports loss; seeks to boost sales with Apple iPod accessories

Apple Store“Creative Technology Ltd., whose music players compete with Apple Inc.’s iPods, reported its fourth loss in five quarters after sales in the U.S. and Asia were lower than the company expected,” Mark Lee reports for Bloomberg.

“The net loss narrowed to $23.6 million in the fiscal third quarter ended March 31, from $114.3 million a year earlier, the Singapore-based maker of Zen and MuVo music players said today. The loss a year earlier was widened by a $41.6 million one-time restructuring charge for a unit,” Lee reports.

“Creative said today that job cuts will help operating expenses fall 20 percent by the end of September. The company is seeking to boost sales and profit by supplying Cupertino, California-based Apple with iPod accessories and providing outsourced production,” Lee reports.

“Creative received $100 million from Apple in October after the two companies settled a patent dispute over content- navigation technology used in iPods. The payout helped Creative post a record $92 million net income in the three months to Dec. 31, the first profit in four quarters. As part of the resolution, Creative would become a supplier of accessories for Apple’s iPod, the two companies said,” Lee reports.

Lee reports, “The iPod had about 72.7 percent share of the digital music player market in the U.S. in January, according to research company NPD Group Inc. Sandisk Corp. had 8.9 percent, while Creative’s share was 2.9 percent.”

Full article here.

20 Comments

  1. So by my count, Creative has already pissed away approximately $32 million of the $100 million that Apple paid them. At this rate, they’ve got maybe 8-9 months left before they’ve burned thru all of it. Really nice business model they’re got going there.

  2. Fourth loss in five quarters ?
    And the only reason they made money in the fifth one is because Apple gave them 100 million ?

    Sounds almost as bad as the Zune. ” width=”19″ height=”19″ alt=”cheese” style=”border:0;” />

  3. It’s funny, in the past, people have joked that the Apple/Creative legal settlement allows Creative to make money by supplying “Made for iPod” accessories. It turns out to be more than a joke. That’s their strategy!!!

    Also, “outsourced production” means they will be happy to make iPods or iPhones if Apple needs more capacity than FoxConn and others can provide.

    MW: honestly it was “respect” as in Creative have learned the true meaning of “respect”.

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