“”This was our second consecutive quarter of selling two million MP3 players, an achievement that further positions us as an industry leader in the explosive MP3 market,” Sim Wong Hoo, Creative’s CEO said in prepared remarks.
Hoo said that his company will continue to aggressively price its players, but warned that it would move profit margins lower in the short-term.
Craig McHugh, president of Creative conceded that the company is beginning to feel the financial pressure of Apple’s strategies. McHugh said that the price drops in the iPod Mini were larger and the aggressive pricing of the iPod Shuffle was lower than expected. Due to this, Creative’s gross margins came in lower than the company’s guidance. “
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