Found on ChannelNewsAsia:
Computer audio equipment maker Creative Technology Ltd posted a 72 percent fall in quarterly net profit due to increased competition and lower selling prices of digital music players.
Nasdaq-listed Creative said it had net profit of US$15.9 million for the three months ended March 31, its fiscal third quarter, including a $14.8 million investment gain.
This compares with earnings of $57.0 million a year earlier, including an investment windfall of $48.3 million.
Creative has been fighting for a share of the high-growth MP3 market against Apple Computer Inc’s market-leading iPod and other rivals.
And what have I been saying ALL ALONG about jumping on bandwagons, everyone?
Creative is now in a position identical to that of HP. HP is currently being slaughtered at the high-end by IBM, and brutally crushed in the low-end by Dell. Either compete by services and value (IBM), or by price and volume (Dell). HP is stuck in the middle with no where to go, and is basically now a glorified printer-cartridge seller (their only source of profits for the last 2-quarters).
Creative is facing competition in mp3 players from cheap volume producers from China and Taiwan, and Apple, who is selling the iPod as a distinctive, high-value lifestyle product. How is Creative going to compete? Heck, even the most powerful man in the world has his own iPod One.
Creative not being very creative nowadays, innit?
Channelnewsasia.com - Creative’s Q3 net profit plunges 72% to US$15.9m
BBC NEWS | Americas | Bush’s iPod reveals music tastes
2 Comments
deja vu.
from Jos Birken’s article “Design or Die” in Wireless World (april edition i believe, i forget)
“Design is king, and the unstoppable iPod marketing machine will take care of the rest. Time for Creative to get creative, I suppose.”
on the other hand, the iShuffle retails at a lowest price point that even some cheapass chinese/korean players, and Apple’s broader business plan seems to have shifted, at least in part, towards budget markets (the mac mini). i’ve even heard somewhere that you could get your iShuffle from your nearest 7-11.
that sorta falls outside your services and value vs price and volume catagories, making Apple a HP of sorts, except i doubt Apple’s “halo effect” profits were based on cartridge sales.
Hello, I think you got your facts wrong on the HP one, the pre-merger HP was a profitable printer company. The merger with Compaq dragged them down to the current state. The printer business is profitable, so is the server sector, it’s the consumer PC business that’s gnawing at their wounds. As for jumping on the bandwagon, not all companies fail, Dell has practically jumped on every single bandwagon I can think of, from pocket PC to printers to projectors and their handhelds are currently the best there is in the market. The failure of Creative… that’s another story together….