Analysts expect that Creative Technology will put less focus into making MP3 players and more into creating devices for other people's, including the iPod, now that hostilities between the firm and Apple have ceased.

Apple paid Creative $100 million to end all outstanding litigation between the firms over a menu-based navigation system for music players. Creative plans to pursue similar claims against other manufacturers.

Creative also joined Apple's 'Made for iPod' scheme as part of the deal.

Analysts now believe the company will make more money supplying components and accessories for others in the market, including the iPod and Microsoft's soon-to-ship Zune music player.

The company may also provide audio chips based on its own technologies to others in the market, analysts predict.

"Creative is unlikely to go bust, but it would probably need to downsize its MP3 business, undergo a rebranding exercise and seek alternative revenue sources in order to survive profitably," NetResearch-Asia analyst Russel Tan told Reuters.

"The stand-alone MP3 market is a sunset industry as smartphones and personal digital assistants will increasingly incorporate these functions, and prices will continue to fall," he added.