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News
Analysts: Creative Needs to Make Changes to Survive
Tuesday, September 5th, 2006 at 3:00 PM - by Brad Cook
Creative may have essentially lost its battle to gain much traction against Apple's wildly popular iPod, but the company can survive if it makes some changes, according to analysts interviewed by Reuters' Jennifer Tan.
"Creative is unlikely to go bust, but it would probably need to downsize its MP3 business, undergo a rebranding exercise and seek alternative revenue sources in order to survive profitably," NetResearch-Asia analyst Russell Tan told her. "The stand-alone MP3 market is a sunset industry as smartphones and personal digital assistants will increasingly incorporate these functions, and prices will continue to fall."
While another analyst pointed to flash memory inventory management as a key to Creative's success, CLSA Asia-Pacific Markets analyst Chua Su Tye said: "The issue with Creative has never been about managing costs, but rather a dismal marketing budget that failed to extend the lead of its ideas into an increasingly affluent consumer market."
Creative's high-end Sound Blaster X-Fi audio card could be the solution to its problems, according to DBS Vickers Securities analyst Don See. "Solutions for consumer electronics devices, using the X-Fi platform, could be launched over the next six months, and this could allow Creative to boost margins and distance itself from other rivals."
Thanks to Macworld UK for the link.
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