With Apple a No-Show, Creative Zen the MP3 Player Favorite

LAS VEGAS, NV -- With Apple Computer deciding not to exhibit at this weekis International Consumer Electronics Show, Creative Technology and its Zen portable media device is getting big crowds and positive response from show attendees.

"Itis not an iPod, but itis a viable alternative that has incorporated many of the features, colors and price of the Apple product," said Mary Phraties, a buyer with a small chain of electronics stores in Nebraska. "This will sell at our stores, and weill offer it as a formidable alternative to the iPod, which we sell."

Much of the reaction among attendees flocking to the Creative booth was the same.

"This is not an iPod-killer, but I think itis the closest thing to it," said retail buyer Jason Snell. "The key to selling this over an iPod is to talk about performance and its price (at US$249.99)."

Creative on Thursday announced plans to release three new models of the Zen, including a 1 gigabyte flash-memory device. The other new models being readied will offer 4GB and 6GB of storage, the company said. The 1GB model will be available some time in the first quarter for $199.99. The 4GB and the 6GB models will be available later this month, for $229.99 and $299.99, respectively. A 5GB version of the Zen Micro is already available and was the primary device CES attendees touched and played with (see photo below).

One CES attendee playing with the 5GB Creative Zen digital media player.

Many others looking at the Creative Zen felt its benefits lie in its ability to access a wider range of online music choices.

"Appleis decision to not share its digital rights management (DRM) technology and not opening up to consumers buying music from other places will end up hurting Apple. Iim confident of that," said a retailer buyer from a nationwide chain, who asked not to be identified. "We sell the iPod in our stores, but weire finding more customers talking about choice when they buy an MP3 player. They canit get as much choice in an iPod, and theyire starting the realize that."

Despite Appleis choice not license itis FairPlay DRM, the company still holds almost a 90% market share among hard disk-based digital media devices, according to the NPD Group. In its last report on retail figures for November, Creative held a less than 4% share on the same space. As for flash-based players, Creative ranks as number three among makers, with a 15% market share.

Choice of colors was also a big sales point for retailers seeing the Zen for the first time at CES.

"We know how popular the iPod mini in its many colors (five) was during the Christmas buying season last month," said Lisa Murphy, a buyer with Fryis Electronics. "Creative will find offering color choices (ten) will be successful for them as well, I think."

Creativeis presence and new product announcements at CES are a continuing sign that the company has Apple in its sights and is remaining competitive in the digital media device market. In November, Creative said it would spend $100 million in 2005 to market its portable media devices in a worldwide campaign to grab market share from Apple Computer and its popular iPod player.