Apple iPod Accessory Maker, Creative sinks into loss in Q3 ~ Creative Labs Zen MP3 Players Sound Blaster Card
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Wednesday, May 2, 2007

Apple iPod Accessory Maker, Creative sinks into loss in Q3

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Technology Ltd., whose music compete with Inc.'s iPods, its fourth loss in five quarters after the company said it missed sales estimates in the U.S. and Asia.

The had about 72.7 percent share of the digital music player market in the U.S. in January, according to research company NPD Group Inc. Sandisk Corp. had 8.9 percent, while Creative's share was 2.9 percent.

The net loss narrowed to $23.6 million in the fiscal third quarter ended March 31, from $114.3 million a year earlier, the Singapore-based maker of Zen and MuVo music players said today. The loss a year earlier was widened by a $41.6 million one-time restructuring charge for a unit.

Creative said today it will trim operating expenses 20 percent by the end of September, after job cuts earlier this year. The company is seeking to boost earnings by supplying Cupertino, California-based Apple with and providing outsourced production. Target to return back to profitability on the second half of 2007.

As seen earlier, one of the iPod accessory is the Creative Xdock launched on 11th April 2007 and outsourcing efforts include Outsourcing of X-Fi technology to Auzentech, Creative's competitor.

Creative Labs also talk about the new mp3 player to be launched in coming weeks. They also mentioned about working with key partner such as Walmart on online content and services. Earlier we mentioned about WiFi Creative Zen and this may jolly well happen! Glad that they are not giving up the mp3 market to Apple iPod and will be putting up another fight soon. Cheers!

Craig McHugh

You are going to see some very exciting things we’re doing in mp3. We are also doing some very important announcements in the audio area, the speaker area and what we are doing in . I believe we will position ourselves extremely well for the holiday and I ask you to look to our press releases in the upcoming few weeks to see some of the great things that we are doing, that I believe will have significant impact on our market position.

It is coming up very quickly. We have looked at the market and at how our products currently compete with our Zen V or Zen V Plus – they are doing very well in the marketplace – and our high-end Zen Vision:M. We believe there are opportunities to expand that product line and significantly improve our competitive position against all the other players outside the Apple world, and allow us to increase our strong position there.

We continue to be number two in the world for both flash and hard drive players globally and we believe there is significant opportunity to improve that position. We are going to be expanding the breadth of our offering and we believe that the new products will actually increase the size of the overall market. I’d ask you to just be patient and give us a short period of time while we introduce some great new products.

As you know, many people have credited iTunes as being a critical part of Apple’s strategy, but as we see now, key partners offering such great content, very good pricing and great services, as Walmart and some of our other partners, I think it allows us to have a complete solution for our customers. It is a critical component of our strategy going forward to support those customers and partners and to be able to take advantage of that. I believe that as they further invest in those services, it gives us a very strong footing going forward for the holiday season.

Full article on Creative Technology F3Q07 (Qtr End 3/31/07) Earnings Call Transcript from SeekingAlpha


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