Creative Preliminary Q3 FY07 Results ~ Creative Labs Zen MP3 Players Sound Blaster Card
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Saturday, March 31, 2007

Creative Preliminary Q3 FY07 Results

Bad news, Creative to report Q3 operating loss of $20million. Creative Labs is still not able to pull out of the red for this quarter. Last quarter was good due to $100million payment by Apple. This operating loss is due to lower-than expected sales for Creative products in Asia and the United States, and restructuring charges worldwide relating to cost reduction efforts in the quarter. However sales are expected to come in at approximately $180 million, with gross margins above 20 percent, as promised.

This is most likely to be contributed mainly by Europe sales of Creative Zen V Plus and Zen Vision M or W.

It is sad that Creative, creator of sound blaster, pioneer of MP3 players and now iPod accessory/accessories maker cannot be the market leader of MP3 player instead now it is making quarterly loss due to operating expenses. It is actively cutting down inventory and operating costs to sustain its business.

Being a big fan of Creative now make me worry. No use producing great product like Zen Vision M and X-Fi technology without consumers knowing it. What is lacking, I think it’s the marketing efforts and consumer awareness. Very few people know about Creative in US/America. Well, Creative started off as an OEM manufacturer, dealing mainly with hardware components, which has no concern on consumer behavior or concerns. However, if they are moving into Consumer Electronic sector producing MP3 player, speaker, network router, webcam, etc, consumer behavior will be an important factor. Creative can start off by employing good marketing experts to help create consumer awareness of its line of products mainly Creative Zen MP3 players, speakers, webcam, X-Fi SoundBlaster, fata1ty brand of keyboard, mouse, headset, Xdock, Xmod and so on.


BillyWarhol said...

Yeah it always bugs me when superior products like Creative Zen Vision + others don't do well compared to overpriced overhyped crap like the Apple iPod - but the people seem to buy into it*



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