Sunday, August 14, 2005

Creative Technology Choking on an Apple

Last year, the CEO of Creative Technology, Sim Wong Hoo, talked a lot of smack about Apple and the iPOD. Unfortunately for Sim, his company's performance wasn't able to back up his words. The AFP via Yahoo! News writes that "Creative went into the red for the first time in three years with a 31.9 million US dollar loss in its fourth quarter to June, compared with profits of 6.63 million dollars a year ago. The drop was worse than market expectations."

The downturn can be attributed to several factors. Price wars in the MP3 market, and their brand and products are just not as cool as the iPod. Claudio Checchia at IDC said, "It seems the problem is they are not seen as a trendsetter because that is basically what Apple is doing. You buy into the brand (Apple), you buy into the cool factor."

According to Gartner, "In 2004, 40.3 million MP3 players were produced, up from 14.3 million in 2003. Gartner "expects the figure to grow to 74.4 million this year."