Once upon a time, S’pore tech company Creative went up against Apple & walked away with US$100 million

A good fight.

Natalie Teo |
January 5, 2023, 6:42 pm

We’re not starting a cult but some followers on Instagram would be nice. Thank you.

On Jan. 5, 2023, Singaporeans woke up to the news that founder and CEO of Creative Technology Sim Wong Hoo, 67, had passed away the day before.

The tech pioneer, who became Singapore’s youngest billionaire at the age of 45, was best known for the Sound Blaster sound cards, which dominated the personal computer audio market till the early 2000s.

Battle of the MP3 players

Think MP3 players, and the (now-defunct) iPods would probably come to mind first.

But before the iPod, there was the Creative Nomad Jukebox, the first mass-produced hard drive-based MP3 player.

The Nomad Jukebox shipped in the U.S. in September 2000 and by January 2001, Creative reported that it had sold 100,000 units.

Image via Nostalgia Pictures/Facebook

In 2004, Creative launched a range of new models with a S$165 million advertising campaign with the aim of unseating Apple’s iPod, which had won over more than half of the music player market that year.

According to Forbes, Sim had publicly declared war on Apple—an “unusual step” for businesses in the industry, apparently.

The Singaporean wanted to capture 40 per cent of the global market for MP3 players.

Image via Sim Wong Hoo/Facebook

At the time, Creative was second in line, with 16.5 per cent of the market.

Although sales of Creative products increased, the low margins ultimately took a toll on the company.

In August 2005, they reported a quarterly loss of US$31.9 million (S$42.78 million)–the first loss in three years–compared with a US$6.6 million (S$8.85 million) profit in the previous quarter.

David vs. Goliath

But Creative was not about to go down without a fight.

Those old enough may recall the time they took Apple to court and walked away with a US$100 million settlement—a remarkable achievement for a small company from a tiny island state.

In May 2006, Creative sued Apple, saying that the iPod and iPod Nano infringed on a patent that the company had for the interface in its Zen media player.

Apple countersued.

The legal dispute was eventually settled with US$100 million paid by Apple, granting them license to a patent for the hierarchical user interface used in Creative’s products.

In an interview with CNBC, Sim spoke about his belief that Apple had taken their ideas.

“It was something we had to do because Apple did not just… infringe our patent. Actually, Steve [Jobs] came to our booth, saw our products and liked the product. He saw the future of Apple there.

[…]

Then, he asked our people to go to his headquarter to present it to him. Our people went to look for some collaboration. Unfortunately, I was not there because I was in Singapore. Maybe if I was there, maybe the history would change. He was trying to work something together, but it didn’t turn out.”

The US$100 million, Sim viewed as “consolation prize,” instead of a win per se.

And so David never did defeat Goliath in this instance (iPods also went on to dominate the market), but Creative’s accomplishments were nothing to scoff at either.

By 2007, Creative had hit a milestone of 25 million MP3 player sales.

Sim said at that time, “Shipment of 25 million MP3 players marks a major milestone in Creative history, as our player unit volume exceeds the combined unit sales from some of the biggest names in consumer electronics.”

Foes to frenemies?

That’s not to say that the feud was not without its amusing moments.

But when Apple founder Steve Jobs died of complications due to pancreatic cancer in 2011, Sim, in a show of grace, took out a full page newspaper ad to pay tribute to him.

Image via Sim Wong Hoo/Facebook

Comeback kid

While Creative later faded into relative obscurity as losses continued to mount, Sim never gave up.

He acknowledged the battle against Apple as one of his “worst defeats“, and admitted that Creative had “overestimated” themselves.

By 2019, Creative was back in the game with the Super X-Fi, a technology that recreates a holographic sound experience with headphones.

The Super X-Fi won 14 awards at the 2019 Consumer Electronics Show in the U.S. and led to Sim being lauded in Budget 2019 for his “spirit of entrepreneurship“.

Good old days

Tributes have poured in from folks who have fond memories of Creative products.

Top image via Sim Wong Hoo/Facebook and Getty Images

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