“Creative Technology reported a narrower fourth-quarter loss Wednesday night, but continued to see its overall sales of MP3 players decline in the face of the dominance of Apple’s iPod line of portable media players,” Jim Welte reports for MP3.com.
Welte reports, “The Singapore-based company, which is in the midst of a multilawsuit patent battle with Apple over the navigation systems used in the rival lines of MP3 players, faces an uphill battle in returning to profitability and making a dent in the iPod’s 76 percent market share.”
Full article here.
Info from beleaguered Creative’s earnings release:
Sales for the fourth quarter were $230.9 million, compared to sales of $305.4 million for the same quarter last year. Sales for the 2006 fiscal year were $1.1 billion, compared to $1.2 billion for the previous fiscal year. Net loss for the fourth quarter was $12.7 million with a loss per share of $0.15, including a $10 million tax credit. This compares to a net loss of $31.9 million with a loss per share of $0.38 for the same quarter last year including an investment gain of $9.3 million. Excluding the investment gain, net loss for the same period last year was $41.2 million with a loss per share of $0.49.
Net loss for the 2006 fiscal year was $118.2 million, with loss per share of $1.42, including investment gains of $18.9 million and one-time charges of $41.6 million primarily related to goodwill and restructuring charges for 3Dlabs. Excluding the investment gains and one-time charges, net loss for the 2006 fiscal year was $95.4 million, with loss per share of $1.15. This compares to net income of $0.6 million with EPS of $0.01 for the previous fiscal year, including a non-cash impairment charge of $65.2 million and investment gains of $74.4 million. Excluding the non-cash impairment charge and investment gain, net loss for the previous fiscal year was $8.6 million with a loss per share of $0.10. (source)
For those counting, the word “loss” was used in beleaguered Creative’s earning press release was used one dozen times. Craig McHugh, beleaguered Creative’s president also states in the press release, “we are targeting our return to profitability by the end of this calendar year and continued profitability going forward.” McHugh should go into comedy full-time. Return to profitability? Yeah, if you forget about MP3 players and start making iPod accessories, maybe.
Related articles:
How beleaguered Creative got stomped by Apple Computer – July 10, 2006
Apple and beleaguered Creative ‘open’ to settling iPod patent lawsuits – July 06, 2006
Beleaguered Creative on Apple’s lawsuits ‘retaliation’ and patent disputes – June 21, 2006
Beleaguered Creative issues press release: U.S. ITC to investigate Apple iPod for patent infringement – June 14, 2006
Apple plays hardball: files counter-suit against beleaguered Creative in sympathetic Texas court – June 07, 2006
Apple files second lawsuit against beleaguered Creative Technology – June 06, 2006
Apple Computer sues beleaguered Creative for iPod patent infringement – May 18, 2006
Apple suit seen hurting beleaguered Creative in long run – May 17, 2006
Beleaguered Creative’s lawsuit against Apple for alleged iPod patent infringement shows desperation – May 16, 2006
Beleaguered Creative sues Apple for alleged iPod patent infringement – May 15, 2006
Beleaguered Creative Technology circles the bowl – May 02, 2006
Beleaguered Creative Technology reports largest operating loss in at least five years – April 10, 2006
Joke of the Day: Red Herring headline: ‘Creative may be iPod threat’ – February 28, 2006
S&P Equity downgrades Creative Technology, cites ‘increased competition from Apple Computer’ – February 14, 2006
Apple unveils new 1GB iPod nano for $149; iPod shuffle now starting at just $69 – February 07, 2006
Beleaguered Creative reports 95-percent slump in quarterly profit – January 26, 2006
Don’t call them podcasts! Derivative, er, Creative introduces ZenCast app for ‘audio & video blogs’ – January 04, 2006
Creative’s Zen Vision:M green with Apple iPod envy – December 09, 2005
Apple faces prospect of bruising iPod patent dispute from Creative Technology – December 09, 2005
Creative Technology’s official press relase for Zen Vision:M Apple iPod knockoff – December 08, 2005
Creative’s Sim Wong Hoo vows to ‘aggressively pursue’ Apple over iPod patent – December 08, 2005
Creative announces 30GB Zen Vision:M video-enabled ‘iPod killer’ – December 07, 2005
Beleaguered Creative waves white flag, surrenders self-declared MP3 player war to Apple iPod – November 07, 2005
Beleaguered Creative shifts promotional efforts from music players to new sound card line – September 21, 2005
Apple debuts iPod nano, iTunes 5: how are Microsoft, Napster, Real, Creative, Sony feeling today? – September 08, 2005
Creative explores new way to beat Apple iPod: patent litigation – August 30, 2005
Creative plans ‘very vigorous defense’ of iPod navigation patent – August 31, 2005
Beleaguered Creative Technology’s ‘war’ on Apple iPod not faring well – August 15, 2005
Apple’s iPod shine dims beleaguered Creative Technology’s outlook – August 08, 2005
Microsoft not buying stake in Creative Technology – August 02, 2005
Creative CEO Sim Wong Hoo adds fronts to war against Apple iPod – August 01, 2005
Analyst: Microsoft could buy Creative Technlogy in bid to compete with Apple iPod – July 14, 2005
Beleaguered Creative CEO Sim Wong Hoo ‘optimistic’ the company will survive ‘MP3 war’ – July 01, 2005
Beleaguered Creative may have to write off unsold stock as losses loom – June 28, 2005
Creative Tech’s reduced outlook drags on Apple, PortalPlayer, SigmaTel – June 27, 2005
Creative Tech cuts sales outlook, drags Apple down in early trading – June 27, 2005
Apple passed 20 million iPods sold milestone in early June – June 24, 2005
Apple’s understanding of what really counts makes iPod+iTunes impossible to beat – June 22, 2005
Creative Technology shares slide to lowest mark in almost two years – May 18, 2005
Apple squeezes and Creative’s profit plunges 72-percent – April 23, 2005
Apple iPod pressure forces Creative to drop prices on music players – March 01, 2005
Creative’s self-declared ‘MP3 player war’ against Apple isn’t going very well – January 20, 2005
Creative CEO: Apple iPod shuffle ‘a big let-down, worse than the cheapest Chinese player’ – January 12, 2005
Creative declares ‘war’ on Apple iPod, shoots for 40% market share of MP3 players – December 21, 2004
Creative Technology declares ‘MP3 War’ against market-dominating Apple iPod – November 17, 2004
Mossberg: Dell, Rio, Creative ‘iPod mini killers’ lag badly behind Apple iPod mini – October 27, 2004
Creative pushes to become ‘Pepsi’ to Apple’s ‘Coke’ in digital music player market – August 07, 2004
thats what happens when you try to copy ipod and assume humans will be stupid enough to actually not know the difference.
Question: How does the upcoming* release of Zune play into Creatives “profitability going forward?”
*’upcoming’ in Microsoft context is a word meaning anywhere from 1-5 years from now.
Na na na na! Na na na na! Hey hey hey! Goodbye!
Maybe if they focused on making a good product instead of accusing Apple of stealing there ideas which obviously they never put into a product, maybe they would be profitable.
Watch MS buy Creative, Real and Napster to complete their sweeping loss leader strategy.
Correction, I don’t think my wording came out they way I wanted it in my previous post. Let’s try that again.
Instead accusing Apple of stealing there ideas, which Creative obviously never put into a product, maybe they would be profitable.
Apple should just buy them and then put the trash out and be done with it.
Where is the Creative Death-Knell Counter?
McHugh said after the Q3 results that Creative expected to be profitable again by the second half of this year. Now the Q4 losses are announced, he’s saying that profitability will be seen by the end of the year.
Which do you reckon will come first ? Creative making a profit again, or Vista finally shipping ?
They are both slipping back in time and both their CEOs are making optimistic predictions.
Creative should stop accusing Apple of stealing their ideas. They’re not making any money with their players anyway, so what do those ideas matter?
Steps to returnign to profitablity:
(1) slash R&D budget to stop filling pipeline with new products
(2) coast to obscurity
Aren’t these the same guys who declared war on Apple?
Man, talk about choosing your battles wisely!
Here is a review of the “the Creative Zen Vision:M” from MP3.com:
Pros:
Available in five colors, the Creative Zen Vision:M has an incredible screen, a simple interface, excellent video battery life, an FM tuner and recorder, and a voice recorder. It features a customizable Shortcut button, and it supports a wide range of online music stores and subscription services, as well as video formats. It has excellent audio and video quality.
Cons:
The Creative Zen Vision:M has no iTunes-like video content–yet–or support for Audible content–yet. Some will find the touch-pad controller frustrating. The black model scratches easily. The documentation is skimpy. You must use an adapter for transfers and power, meaning that occasionally you need two cables and the adapter. A dock and an A/V-out cable are not included. Finally, the Zen Vision:M isn’t as elegant as an iPod.
Conclusion: The dazzling, DRM-friendly Creative Zen Vision:M gives the iPod a run for the money as the current high-capacity WMA champ.
Are they kidding?
Those poor bastards. Soon they will have Zune to compete with too! MS is going to kill their friends. Watch it happen.
Then Apple will stand tall against MS for all the world to see. This is soooooo awesome. MS is waging a war almost as badly as the government of the USA.
Hey, don’t beat up poor Creative. I have one of — well some ones knockoff of a Creative mp3 player. 128 Meg, it cost 20$ in close out. It plays a cd’s worth of songs just fine. And the price was so good, I bought 2, incase I lost one.
There is plenty of room for other mp3 players. Use a SD plug in card so you can easily swap music, mini text screen so battery life lasts, and keep the price under $20 so that they are throw away.
See, Creative could be good for something after all.
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Yea Norm,
I bought a car for $100 that has a range of of 50 miles. Wow….. great investment. I’m wondering what’s wrong with the other 23% of the market. Buy something that is functional and useful…..iPod.
MD
Well, I hope Creative doesn’t go out of business because Apple needs some competition or they will not innovate as much and govts will go after Apple for their monopoly (more than they already are).
http://www.cafepress.com/stenar/
Say what you like, Wall St. has reacted positively to this news in after-hours trading with CREAF now worth some 60% more than it was at the close of business because Apple’s “surrender” effectively establishes a precedent that Creative can use to “greenmail” cash out of Apple’s competitors.
However, that’s a one-time $100 million payment that SWH is going to have to be careful with: losing anywhere between $12 million and $30 million/quarter is going to burn through that “windfall” pretty quickly, so I’d concentrate on getting out of the player business – where he’s losing money hand-over-fist – and into other areas where he might have first-mover advantage.