Back in 2004, Creative CEO Sim Wong Hoo said that not only was his company going to overtake the Apple’s popular iPod, but that it would do it by out-marketing Apple,
I’m planning to spend some serious money – I intend to out-market everyone. The MP3 war has started and I am the one who has declared war.
At the time Hoo said that, Apple had 42 percent of the market in portable MP3 players. After making MP3 players the company’s focus and spending upwards of $100 million in that marketing campaign where does Creative stand today?
Apple has about 75 to 80 percent of the MP3 player market. In the 3rd quarter of 2006, Apple sold about $1.7 billion worth of iPods. During the same period, Creative’s total revenues (which includes products other than MP3 players), was a mere $228 million and the company posted a $114 million loss.
Instead of focusing on marketing, Creative should have thought about building a better product — or perhaps less of them. At one point, Creative had upwards of 25 different models of MP3 players for sale. Moreover, most of them suffered from feature creep and were complicated as hell for consumers compared to the relatively simplified features and UI of the iPod.
Sources:
Creative declares ‘war’ on Apple’s iPod. Tony Smith, The Register, November 18, 2004.
Creative’s Loss Surges on MP3 Woes. Ed Oswald, BetaNews, May 3, 2006.
iPod sales drive Apple earnings. iPod sales drive Apple Earnings. Tom Krazit, CNET, April 19, 2006.