Creative takes on iPod with $100 million sales push
Singapore company fights to expand its share of fast-growing digital music market as computer sound card business dwindles.
"The MP3 war has started, and I am the one who has declared war," Creative Chief Executive Sim Wong Hoo told a media briefing on Wednesday, adding that the United States will get the biggest share of the $100 million budget, followed by Europe and Asia.
Singapore-based Creative is fighting to expand its share of the fast-growing digital music market as its computer sound card business declines.
The latest wave of MP3 players store thousands of songs on pocket-size disk drives or smaller flash memory chips. Besides Apple, Nasdaq-listed Creative is also pitting itself against Sony's hard-disk version of its iconic Walkman and Samsung Electronics of South Korea, maker of Yepp MP3 players.
"I'm planning to spend some serious money--I intend to out-market everyone," Sim said at the launch of the company's new 5-gigabyte hard-disk, palm-size Zen Micro player.
Creative is targeting a 40 percent share of the global MP3 market next year, up from 10 percent in the June quarter, Sim said. Apple held a 17 percent share in the June quarter.
"We're targeting (sales of) more than 1 million MP3 players a month in the current quarter, and we are on track. It's our target to beat iPod in this quarter," he added.
Creative said it expected the MP3 player market to reach 30 million units in 2004, and more than double to more than 60 million units by next year.
Sim said he expected rising sales of digital audio players to spur demand for its speakers, which carry higher margins.
Currently, Creative has 600 research and development staff working on its MP3 players, and plans to hire another 300 engineers.
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