Interview With Craig McHugh, President Of Creative Labs ~ Creative Labs Zen MP3 Players Sound Blaster Card
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Saturday, February 23, 2008

Interview With Craig McHugh, President Of Creative Labs

Interview With Creative Labs COO, Craig McHugh
This is a rare interview with the president of Creative Labs who is revealing Creative Labs' strategies and also talks about sound cards, selling direct to retailers and flash-based players.

SIM Wong Hoo may be synonymous with Creative Technology, Singapore's own multinational company. But in recent years, it has been Craig McHugh, president and chief operating officer of Creative Labs - the US subsidiary of Creative Technology - who has been in the limelight.

Craig has become the front man for Creative, flying into Singapore regularly to present the company's quarterly results to analysts and the media. Sim has declined to speak to the press for the last three years.

Apart from managing the Americas' retail and OEM (original equipment manufacturer) business for Creative, Craig is also the head honcho for Creative's sound cards, speakers and headphones product groups worldwide.
Married with two girls and a boy aged 10 to 15, he said his three children are his harshest critics.

"They often give valuable and honest feedback on what they think about Creative's new products. Like the popular pink - that is my girl's favourite colour too."
He was in town earlier this month to talk about Creative's latest financials and to showcase its latest products, when Digital Life caught up with him.

How often do you come to Singapore?
I counted 21 times last year.

Are you the official successor to Sim?
I would love to be but I don't know if I am. But I hope Sim does not retire because his vision for technology and product development is very important for us.

So how did you get involved with Creative?
I was working at a company called Trace in the late 80s which specialised in high-speed replication of floppy disks. Creative was one of Trace's top customers in Asia for its Sound Blaster driver software (which came on) floppies. After Trace was acquired by Nakamichi, I got an offer from Creative to join the company. And the rest, as they say, is history,

Your recent quarter showed a drop in revenue by about 19 per cent. What happened?

It was mainly because of our shift away from hard disk-based MP3 players to purely selling flash-based players only. Because the average selling price of a flash-based player is lower than the hard disk ones, that impacted our revenue.

So why did Creative decide to go flash only?
Two reasons. The first is because prices of flash memory have fallen to verY-low levels and are expected to come down
even more. The second reason is that. flash is also a better solution because it is more reliable and much lighter.

Our first strategy was to shift away from hard disk to pure flash. Our next strategy for this year is to offer higher capacity flash players and we are looking to hit 32 GB this year. As we increase the capacities, it also means we can sell them for higher prices and therefore boost revenues.

How is the sound cards business coming along?
Actually the sound cards and gaming headsets businesses have been doing well because of the surge in online games on the PC. Our US$300 (S$425) Aurvana gaming headset, which has a built-in X-Fi chip inside, has been getting fantastic reviews. We priced this headset at the same price point against top audio brands like Sennheiser and Bose because we believe we are better.

You started selling direct to your retailers in the US last year. Any updates on this?
Our top 10 retail customers in the U are now all direct. Going direct mean better margins for our retailers and therefore making it more attractive for
them to sell our products.

But wouldn't it mean that you would have to hold more inventory and take greater risks without engaging the distributor?
On the contrary, by shipping direct we actually reduce inventory and improve channel management. That's because we build to order and don't stock up distributors in the direct model.

Which are the most popular Zen MP3 colours?
Lime green and pink in the USA.

Via Digital Life

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ALien_BRain said...

Nice interview !

We could have asked a lott more :P

I wonder why Sim so secretive .. hmm..

Creative Fan said...

Mr Sim is very much a technical guy, guess he's not that good at talking. If you notice, most of the quarter results, Craig is doing most of the talking

Anonymous said...

I worked with Craig, and he is simply the most narcissistic and blind manager. He is the captain of the Titanic

Anonymous said...

Worked there for 8 years and got along well with Craig. The real problem was/is Sim. He would ask us to launch products that were inherently defective. I showed Craig some serious deficiencies with one right before launch. He tried to confront Sim about it, but Sim would not budge. He even admitted he had it built that way on purpose because it saved a lot of money. Argh!

Jimmyboy88 said...

everyone may have their reasons for doing something

Anonymous said...

Creative is responsible for destroying e-mu and Ensoniq...Manufacturers and innovators of American made electronic instruments...
They took what they wanted and threw away the rest. Never trust this company... They are everything that's wrong with this world.

Anonymous said...


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how can we trust a whacker who has bad heart? hahaha

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