Creative Technology reported a narrower fourth-quarter loss Wednesday night, but continued to see its overall sales of MP3 players decline in the face of the dominance of Apple's iPod line of portable media players.

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The Singapore-based company, which is in the midst of a multilawsuit patent battle with Apple over the navigation systems used in the rival lines of MP3 players, faces an uphill battle in returning to profitability and making a dent in the iPod's 76 percent market share.

For its fourth fiscal quarter that ended June 30, Creative posted a loss of $12.7 million, or 15 cents a share, compared with a net loss of $31.9 million, or 38 cents a share, in the same period a year ago.

But while the top line improved, total sales did not, with quarterly revenue falling 24 percent to $230.9 million from $305.4 million for the same quarter last year. For its 2006 fiscal year, sales also declined, from $1.2 billion last year to $1.1billion.

"We are targeting our return to profitability by the end of this calendar year and continued profitability going forward," Craig McHugh, president of Creative Labs, Inc., the company's US unit, said in the company's earnings conference call.