updated 11:15 am EDT, Thu August 9, 2007
Creative blames iPod, Zune
Creative, most famous for its sound cards and media players such as the Zen V Plus, is blaming newly-reported fourth-quarter losses on competition from Apple and Microsoft. Losses in the period ending June 30th amounted to $19.3 million, a substantial increase over the $12.7 million lost in the same period last year. Sales have fallen 28 percent to reach $165.2 million. The company attributes this primarily to the continuing dominance of the iPod, which holds 68.9 percent of the US market, but additionally to the introduction of the Zune, and more recently Microsoft's price cuts to clear out stock. Despite it being a new product, the Zune currently holds 2.5 percent of the market.
In a positive turn for Creative, it produced net income of $28.2 for the latest fiscal year, a reversal of the $118.2 million in net losses the year prior. Part of this profit stems from a $100 million fee from Apple however, a settlement over an iPod patent dispute. The terms of the deal mean that Creative is now an active supplier of iPod accessories. [via Bloomberg]