Friday, October 20, 2006  

MP3 wars: Slash and burn.

Summer's out and school's in.

This, apparently, also means a wardrobe makover and a back-to-school goodie bag for some US schoolgoers.

Included in the gift pack are a personal computer and an iPod.

At least that's how it looks like when, according to thestreet.com, Apple says its notebook and iPod sales “were helped by a robust back-to-school season”.

iPods, in particular, have become more affordable after Apple cut prices.

Even so, the company reported a higher quarterly profit and revenue for Q4.

If Apple's slashing prices off its famed MP3 players, you can expect its competitors to follow suit.

Creative Technology has a whole range of Zen variants to consider and a set of Apple iPod accessories to produce.

So on one hand, it has to contend with lowering prices to make volume sales and on the other, it is producing something for the competitor.

Is there a win in this for Creative at all?

I think not.

Especially when Microsoft is launching its new Zune “music and entertainment project” at Christmas, also referred to as the “iPod killer”.

Unlike Apple and Microsoft, who both have other product segments to fall back on, Creative seems to be struggling to grasp on to something it can call its winner.

Sure, it's got its soundblaster and various popular products, but it seemed like it was putting all its eggs in the MP3 basket after it declared war on Apple's iPod monopoly.

Maybe Sim Wong Hoo's got to start wearing jeans before he can come up with a fighter of a product in his own realm.

Because the way I see it, his toys are not going to survive Christmas without dragging the company down with them.

Serene Lim

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