Question-and-Answer Session
Operator
Thank you. (Operator Instructions). Our first question comes from Reik Read with Robert Baird & Company.
Reik Read - Robert Baird & Company
Thanks, good afternoon guys. Just in terms of the product gross margins, they were down just a little bit over 200 basis points sequentially. I understand the revenue was down, but wasn't down that much. Can you help us understand what else might be putting some pressure on those margins? And you had mentioned competitive pressure in your, in your script. Could you comment on that?
Robert Driessnack
Thanks Reik. This is Bob. Couple of comments, we are seeing a continued impacts, sort of the economic environments and the overall impact on volumes which is were down just a little bit. Our outsourcing model is working well; we are seeing the cost savings and things there. I do have some fixed cost but still causes to de-leverage a little bit. Competitive pressures, really it starts with bio-power in this environment and across all over markets. We are focused on winning business that is our business in many cases.
Also from the product geographic mix, while Europe was up sequentially from the first quarter to second quarter it's still down substantially from the prior year. And as Pat, I think, has commented a couple of times Europe historically has been one of our better or our best margin region overall.
Product mix also came into play with just certain products that carry a little bit higher gross margin being a smaller share of our mix in the second quarter.
Reik Read - Robert Baird & Company
And when we look at the new products that you guys have now released, is there some margin weakness that will occur is those ramp?
Patrick Byrne
Reik this is Pat. I would expect these new products to establish strong pricing power as a result of having unique technology as I mentioned the CN50 is the most advance rugged mobile computer in the industry. So, we have established those pricings and there are margin objectives as we launched these products. I think there is natural transition point occurring as these products get introduced in some cases replacing the volumes that we had in our older I mean our more established products. So I would expect overall that these would add to the margin profile in the future.
Reik Read - Robert Baird & Company
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