Zen and the art of market share losses

Think it's easy competing against the iPod? Just ask Sim Wong Hoo, founder of Creative Technology. AFP has an inside look at the company's frustration at its failure to achieve market dominance with the
Zen line of digital audio players, despite competing aggressively on features, pricing and style. The company has watched its net profits decline by 72 percent in the latest quarter, and now faces competition not just from Apple but from other Asian rivals as well. "We think that it will be difficult for Creative to make a decent return on MP3 players in the next few quarters especially when other consumer electronic giants are starting to pile in," Dharmo Soejanto, an analyst with Kim Eng Securities in Singapore,
told AFP. "(Companies) like Sony and Samsung have bigger marketing budgets and distribution reach." Meanwhile, Sim has bet the store on the media player market, which now accounts for 68 percent of the company's revenues. Oh, well. At least they have their sound cards to fall back on.