Creative Technology and Soundbuzz have set their sights on capturing Asia's online-music market.
The companies will work together to set-up online music stores in regions including Hong Kong and India. Their first Soundbuzz.com store launched in Singapore on Tuesday, offering 250,000 songs at $1.16 each.
Sales of music in Asia have suffered due to CD piracy, with sophisticated piracy syndicates selling CDs of downloaded music. According to data from the International Federation of the Phonographic Industry, in 2003 music sales slid 9.8 per cent to $5.8 billion, a fifth of the world's total and outpacing a fall of 7.6 per cent globally.
According to industry data half of all music sold in Taiwan in the past two years was pirated, while nine of every 10 recordings in China were fakes.
Soundbuzz chief executive Sudhanshu Sarronwala believes habits are changing. He told Reuters: "We've all been through the huge CD-burning mania of the past. What has clearly emerged over the last 12 to 18 months is that the method of consumption of music is changing. It's very much portable device-led. That's really the future of consumption of music."
However, according to the report, few Asian music labels are willing to release digitized music, often fearing piracy.
Singapore-based Creative will sell its 20GB Zen Touch media player equipped with a function for transferring songs from Soundbuzz.Com stores.
Apple has announced no plans to open an iTunes Music Store in Asia.