James Delahunty
22 Apr 2005 15:51
Creative has announced that it has sold 2 million MP3 players in the first quarter of 2005, a number that is equal to the holiday quarter of last year. The company did admit however that it is feeling financial pressure from Apple's strategic pricing of its iPod music players. "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.
He said the company will continue to aggressively price its players but also warned that it may move profit margins lower in the short-term. Craig McHugh, president of Creative said that the company is now starting to feel the pressure from Apple's pricing strategies. He said that the price drops in the iPod Mini were larger and the aggressive pricing of the iPod Shuffle was lower than expected.
The company is hoping that rises in sales will help it to get better deals with suppliers so it can lower the cost of manufacturing the players and reduce the decrease in profits. Creative struck deals with Circuit City and Best Buy to carry the Zen Micro player which substantially increased the products availability. Apple has been selling iPods at Best Buy since 2002.
Source:
Betanews