Craig McHugh
Craig McHugh
adverse drop effect flash gross inventory lower margins memory prices resulted sales
There was a drop in flash memory prices in the quarter, with a precipitous drop in prices at the end of the quarter. This had a significant adverse effect on our sales in the quarter, and resulted in lower revenues, lower gross margins and inventory write-downs in the period.
five highest increased key past product quarter revenue sales
Our revenue in the quarter was the highest for any quarter in the past five years, with increased year-over-year sales in each of our key product categories.
gross increased inventory mp3 negatively overall percent players prices selling though
Even though we increased overall revenues 50 percent year-over-year, the lower-than-expected selling prices for MP3 players and the inventory write-down negatively impacted gross margins.
achieved goal primary returning
Of primary importance, we achieved our goal of returning to profitability.
expenses few focus further increase level lower next operating overall plan reduce
In the next few quarters, we plan to further lower our inventory, reduce our overall level of operating expenses and we will increase our focus on our higher-margin businesses.
apple claim legal patent tried
Apple tried to claim invention, but this patent dispels that. We are going to look at all the alternatives that the patent provides. We can look at legal remedies.
according analyst apple business challenges currently deal demand face flash holiday impact industry key memory mp3 players primarily result secured shortage special supply
One of the key challenges we face in our MP3 business is an industry-wide shortage of 1GB flash memory. Industry demand for high-capacity flash memory currently outstrips supply and this will impact availability of our 1G-byte flash MP3 players for the holiday quarter. The shortage of flash memory, according to industry analyst speculation, is primarily a result of a special deal that Apple has secured from a key supplier for the holiday season.
calendar categories determine examining expenses gross half improve margins operating percent product reduce return second target
We are examining each of our product categories to determine how we can improve revenues, return gross margins to 20% percent or higher, and reduce operating expenses as we target a return to profitability in the second half of the calendar year.
agile
This will make us a leaner, more agile operation.
achieved average higher mp3 players prices selling targets unit volume
We had set our targets higher for unit volume and average selling prices for our MP3 players than we achieved in the period.
bringing companies interested open patent protecting talking technology using vigilant vigorous
We're very open to talking to all the companies interested in using our interface. We're going to be very vigorous in bringing our technology to market, and very vigilant in protecting our patent rights.
patent pleased protection provides
We're pleased about the patent and the protection it provides us. We're evaluating all the alternatives.
clear interface largest market second share user
We're second to them in market size, but now I think it is clear that our user interface has the largest market share in the world.
believe calendar closer current quarter return
We believe we can get closer to break-even in the current quarter and that we can return to profitability by the end of this calendar year.