Creative’s Profits Drop due to Competition
9 08 2007 
Creative Technology Ltd. reports a wider fourth-quarter loss due to competition from Apple’s iPod and Microsoft’s Zune. From $12.7 million, the net loss in the three months (ended June 30) grew to $19.3 million. Sales fell 28% to $165.2 million.
The market has always been marked by intense competition but what Creative needs to do now is bring down expenses so they can drop prices, just like what Microsoft did. Microsoft, the world’s largest software maker, lowered the price of the Zune to clear their stocks and to challenge the iPod. Researcher NPD Group Inc. Sandisk Corp says that the iPod got 68.9% of the US market for digital music players in March. Creative’s share was 3.6% followed by Microsoft at 2.5%.
The irony that Creative is losing profit due to the iPod is a little striking. If you can remember, the Creative Zen’s patented user interface is used by the iPod; Apple paid $100 million for this technology.
[via bloomberg]
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