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Creative warns of operating loss

updated 01:50 pm EDT, Wed April 5, 2006

Creative warns of loss

Creative Technology today warned of an operating loss in its fiscal third quarter that ended in March, saying lower margins and inventory write-downs were responsible. The company's Zen and Nomad media players are in direct competition with Apple's iPod line, and while Creative's players work with Windows Media Player, the devices are incompatible with the iTunes Music Store. Creative warned in February that it would realize one-off charges of approximately $9 million due to graphic unit restructuring, and now the company expects an operating loss of $55-65 million on revenues of $220-230 million, according to Reuters. "The operating loss is primarily attributable to a drop in flash memory prices in the quarter," Creative said. "The sharp drop had a significant negative impact on sales in March and resulted in lower revenues and gross margins and inventory write-downs in the period."

 
Previous Comments

The War...

04/05, 03:07pm reply

How's that $100 million war to topple the iPod going, Mr. Sim Wong Hoo?

http://www.cdfreaks.com/news2.php?ID=10927

ZinkDifferent

Fresh-Faced Recruit

Joined: Jan 2005

0

Bye bye Creative...

04/05, 03:07pm reply

You will not be missed when you're gone. I'm curious why they haven't sued apple for patent infringement yet. Remember Creative's CEO was boasting about how they have that patent that they will pursue vigorously?

madgunde

Fresh-Faced Recruit

Joined: Nov 2002

0

talk too soon....

04/05, 03:25pm reply

Yes, I agree Bye Bye Creative ... but things can change 'SO' fast.

Today I saw a new LG Music Cell Phone (550c?) that really looks a bit like a nano ... If Apple doesn't get into this market, the Cell phones will eventually drown them out, even though I realize it's the entire package that people need (iTunes/Hardware, etc.)

With Apple in 'some' ways getting into the Windows world with the Boot Camp stuff, the stock market is raising, but in some ways it's a defeat as it's OK to run Windows on a Mac ... does Apple become a hardware company? Do they change their whole business and sub-license MacOSX.

I cerntainly hope Leopard has some tricks up its sleeve as well as some great new hardware (tablet, etc.) comes out this year.

trevc

Fresh-Faced Recruit

Joined: Mar 2000

0

Well

04/05, 06:27pm reply delete

Well I suppose it depends on whether you consider a glass half empty or half full. Personally knowing that you won't make substantial inroads into Windows market share without taking the pain out of escaping from being a sheep is a positive and potentially rule changing opportunity for Apple. Some of the greatest wars have been won from positions of apparent inconsequence of the eventual winner in the view of the eventual loser.

spyinthesky1

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