Creative plans to be less 'creative'

CEO admits it was too hasty and unfocused in launching products previously, and plans to simplify product lines down to audio and tablet products to nurse ailing company back to health.
Written by Ellyne Phneah, Contributor

SINGAPORE--Creative Technology plans to curb its innovation tendencies, which resulted in it being spread too thin with too many products released in the past, and plans to focus solely on the audio and tablet segments as well as key markets such as China, reveals the company's CEO.

According to Sim Wong Hoo, the company's "curse" was that it had been too "creative" and this led to it having too many ideas and launching too many products, he explained at a press briefing held here on Tuesday. Within the company, there had been conflicts between engineers and marketers in wanting to develop innovative technology and launching more products that resulted in a lack of product focus and difficulties in marketing efforts, he added.

One example he gave was the MP3 player market, in which Sim said the company lost out to Apple because it had introduced too many of such players without a proper focus. By comparison, Cupertino managed to marry marketing with innovation by betting on its iPod device, he noted.

"When you try to [launch numerous products] and serve everybody, you end up serving nobody," the CEO said. "Doing everything doesn't work."

Simplicity is key
Going forward, Creative will be focusing on both its audio products, which Sim described as its "core strength", and its tablet device HanZpad, which was launched with its wholly-owned subsidiary ZiiLabs in February and targeted China's education market.

The tablet business will be handled by the company's Chinese associate, Creative Knowledge, while the Singapore team will concentrate on growing its audio segment, he elaborated. China-based Creative Knowledge, which the company has "less than 50 percent stake in", plays in the software and education technology arena, a company spokesperson later clarified.

China, too, will be a key focus market for the Singapore-based company as it has a "strong" brand name there and the large market size presents growth opportunities, the CEO said.

He declined to comment if this strategy would bring Creative out of its slump and reverse its market fortunes. The Singapore Exchange-listed company has been in the red for 14 straight quarters and posted a net loss of US$33.9 million in the second quarter of 2012.

In terms of product design, Sim said the company will now focus on "simplicity" and manufacture "good" products before introducing them into the market. This, he added, will appeal to today's generation of consumers who are looking for something simple and easy to use.

Achieving this balance will not be easy though, he told ZDNet Asia at the event sidelines. But the company will learn from its past mistakes, in which too many MP3 players were shipped out too quickly to compete with other vendors, and generated bad customer feedback.

Creative will now be "patient and careful" and ship products out only after careful vetting, he reiterated.

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