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Creative declares 'war' on Apple's iPod

MP3 player firm commits $100m to out-spend rivals' ad campaigns

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Digital music player maker Creative has pledged to spend $100m to out-market Apple in a bid to take the market away from the iPod.

And not just Apple. Speaking in Singapore this week, Creative CEO Sim Wong Hoo bullishly pronounced: "I'm planning to spend some serious money - I intend to out-market everyone."

"The MP3 war has started and I am the one who has declared war," he thundered.

The company's goals are undoubtedly ambitious. Sim said Creative is looking to take 40 per cent of the worldwide digital music player market in 2005. During the Q3, it managed a mere ten per cent. Apple stood at 17 per cent. Those figures show there's plenty to play for, and indeed, Creative is on track to sell over 3m devices this quarter, Sim said.

That, he believes, will push it ahead of Apple. "It's our target to beat iPod in this quarter," he said. But a number of analysts have already forecast sales of over 4m units during Q4.

Apple took 42 per cent of the US digital music player retail market in August, according to research company NPD. Its share rises to a dominating 82 per cent when you focus on the hard drive segment.

Creative is certainly going to grab share from the many lesser players, but while in the past it's only been up against the likes of Apple, Rio, iRiver and the no-name manufacturers, now it faces Sony, Toshiba and other major consumer electronics companies. Sony in particular has likewise pledged to wrest market leadership away from Apple - having invented the Walkman, Sony almost thinks the market is its by right - and has upped its marketing spending accordingly.

If pre-Christmas magazine gift-buyers' guides are anything to go by, Sony's 20GB hard drive-based Network Walkman NW-HD1 is getting more column inches than Creative's Zen Micro, its first player with the potential to eat into iPod's market share.

Apple, meanwhile, continues to promote iPod. So do all the companies - many of them big names in their own fields of endeavour - who make accessories for the popular player. Every time high-end hi-fi company Bose advertises its iPod speakers, it's just as much a promo for the Apple product. Ditto Dunhill, BMW, Gucci et al. These are names consumers are very familiar with - you can't say (yet) the same for Creative. ®

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