Six months after founder Sim Wong Hoo declared 'war' on Apple's iPod, it seems safe to say that Singapore's Creative Technology has lost the early skirmishes.
The company sold only two million MP3 players in the Christmas quarter of 2004, and two million in the first quarter of 2005, compared to iPod sales of 4.5 million and 5.3 million over the same periods, respectively.
The company sold only two million MP3 players in the Christmas quarter of 2004, and two million in the first quarter of 2005, compared to iPod sales of 4.5 million and 5.3 million over the same periods, respectively.
After pledging to spend US$100 million to outmarket Apple and, indeed, everyone in the MP3 player market, these are not results that will inspire confidence. Much of its woes can be attributed to Apple, which launched the iPod Shuffle, updated its iPod Mini and cut prices on its other models, forcing Creative to follow suit.
The challenge for Creative, accordingly, looks clear. Having brazenly targeted Apple, consumers expect the Singaporean company to deliver on its brand promise of being synonymous with personal digital entertainment.
The recent launch of the Creative Zen Neeon should breathe new life into the company. The successor to the considerably successful Zen Micro series, the Neeon sports a black finish that can be personalised by decorative 'Creative Stik-On' skins, which come in a range of trendy designs. Pitched as more of a fashion offering, the Neeon is sleek and simple to use.
Creative, of course, is no stranger to adversity. Since its inception in a Singaporean shopping mall in 1981, the company has successfully navigated the vagaries of the global IT market to become a worldwide leader in digital entertainment, and a symbol of Singapore's global aspirations, becoming the first Singapore company to list on the Nasdaq in 1992.
Starting with its Game Blaster soundcards, which revolutionised computer audio systems in the late '80s, Creative has been able to leverage its audio technology expertise, rolling out the world's first hard-disk based MP3 player, the Nomad Jukebox, in 2000. Along the way, the company has grown into the leading option for consumers that have not jumped aboard the Apple bandwagon. But can Creative sustain this momentum?