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Creative adds MP3 players to take on iPod

Will twice as many product lines help the MP3 player maker catch up with Apple?

Computer audio equipment maker Creative Technology said on Thursday it would double its eight MP3 player product lines by the end of 2004, stepping up its competition with Apple Computer and others.

Singapore-based Creative is fighting to expand its share of the fast-growing digital music market as its computer sound card business declines. It has introduced well-received players that store thousands of songs on pocket-sized disk drives or in smaller flash memory storage.

Its latest Zen music player has been hailed by reviewers as one of the strongest rivals to date for Apple's market-leading iPod.

With the backing of Microsoft, Creative has also launched a handheld device called the Portable Media Center that can store and display video and photos.

Creative said it held a 10 percent share of the global market for MP3 players in the June quarter, coming second after Apple, which had a 17 percent share.

"This year, MP3 will be the hottest segment--last year, it was digital cameras," Creative Chief Executive Sim Wong Hoo told reporters.

"We intend to double the MP3 player lines by year-end from eight to 16, to provide more choice to the big markets, and each line will have different design, features, (storage) capacity and colors," he added. Sim declined to elaborate on product details.

Creative is also pitting itself against Sony, which plans to release a rival to the iPod.

Creative, which is in the process of scrapping its Nasdaq listing, plans to extend its marketing push to Hong Kong, Australia, Tokyo, South Korea, Shanghai and Beijing.

"Our marketing campaign had phenomenal success in Singapore, and we're prepared to scale this globally in a big way for this Christmas," Sim said.

He declined to reveal how much Creative was planning to spend on its television, print and Internet advertisements, some of which mimic's Apple's advertising for the iPod, but said it would be much bigger than the "multimillion-dollar budget" for Singapore.

"We intend to lead in this space. We intend to out-invest everybody else. We will be relentless," Sim said.

Last month, Creative forecast lower earnings in the July to September quarter on a rise in advertising expenses for its new products.

Story Copyright  © 2004 Reuters Limited.  All rights reserved.