Creative to focus on sound cards
Creative Labs CEO, Sim Wong Hoo shouldn’t be happy. Last year, the Singapore-based company aspired to a 40% marketshare. $100M and a year later, and they’re at 10%, when arch-rival Apple is seven times that, and they’ve posted a $31.9M loss in their most recent quarter. Lesson learned, and fight abandonned. That’s not to say they’re exiting the DAP business (a la Rio); just that the greater part of their marketing money will now be spent on promoting their new sound cards, according to a BusinessWeek report [via].
What was wrong with Creative? Well build quality was good, sound quality was top-class and feature-wise they wouldn’t leave us complaining. But they missed on the software part of the equation. Creative’s MediaSource and the synergy with Creative’s players is a joke when compared to the iTunes + iPod combo. Add to that a slightly poorer UI (that kept getting better though) and a lot less hype, and you see why they finally succumbed to Apple’s dominance. This is another fatal flaw to the competition.
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[...] The key goal for the company is to return to profitability by the end of the current calendar year; they hope to sell loads of Xtreme Fidelity and X5 sound cards (we had reported they’re changing to focus on sound cards), grow in the “speakers for MP3 players” market, maintain monentum on the MP3 player market (good luck with that), and reduce inventory (always a wise move). [...]
...added by Creative posts Q1 financial results — things are tough -- HiFi Blog /// January 16th, 2006 at 15:16 PM