Tuesday, April 12, 2011

Remembering Craig Mchugh

We are hearing news that Craig Mchugh has stepped down as the president of Creative. Major re-structuring efforts are said to be in the works with an announcement to be made over the next weeks (but don't hold your breath for it). Meanwhile, here is an interview Craig has done with Digital Life way back in 2008. In his many years with Creative, he was best remembered for launching the ZEN V series of players in Singapore (see video) and ... I don't really remember.

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.

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