Creative Technology sees profits drop 72%, but sales soar

Friday, April 22, 2005

Creative Technology Ltd, maker of the popular Zen and Zen Micro MP3 player ranges, has reported a 72% drop in quarterly profits. However sales rose 65%.

Net income was $15.9m, $0.18 a share; down from $57m or $0.68 a share a year earlier. Sales were $333.8m.

The results show the extent of Creative's current price war with rival Apple Computer. Both firms have dropped prices on key products on numerous occasions in recent months in an attempt to steal market share in the fast growing digital audio market.

Creative, based in Singapore, has thus far sold 2m MP3 players worldwide, making it the number two player in the market.