Audiovox 1997 Annual Report Download - page 6

We have been able to compete against
t he giants in the indu st ry such as
Motorola, Nokia and Ericsson because
we are unique in our approach to the
wireless industry. We are a manufactur-
er without a factory and we believe that
we prov ide our customers with even
more services than our manufacturing competitors.
First of all, we have the ability to source all of the different technologies
that are and will be a part of this growing market. As the new digital
technologies emerge, this ability will allow us to provide product to the
entire industry without technology limitations.
Second, we are flexible. We provide our customers with extensive
engineering support both in product development, training and ser-
vice programs as well as sales and marketing. This flexibility allows us
to tailor product and programs to our customers and their specific
market needs.
Third, we have the commitment to the wireless industry. A commit-
ment to continue to develop products and programs that give our cus-
tomers an edge over the competition. We believe that we provide a
measure of service that is simply unavailable from any other supplier
in the industry.
Industry estimates indicate that approx-
imately 30% of the US market has shift-
ed from analog to digital technology. At
this time, only Audiovox, Qualcomm,
SONY and Nokia are delivering CDMA
product. Our new CDM 3000 began
quantity delivery in February and we
plan to begin shipping approximately 30,000 CDMA phones a month
by April, 1998. We expect to introduce TDMA and GSM/PCS product
during the year.
Q U E S T I O N :
Audiovox is not a manufacturer. How do you compete?
A N S W E R :
Q U E S T I O N :
How does your product line shape up with the new
technologies?
A N S W E R :
Since 1993, ACC’s international sales have grown to
represent nearly 25% of total communications product revenues. We
sell our products in over thirty countries worldwide. To date, our
strongest emphasis has been in Canada, South and Latin America with
some penetration in markets throughout Asia and Europe. Europe
and Southeast Asia are targets for the new GSM/PCS world phone that
we expect to introduce later this year.
Q U E S T I O N :
Where do your international sales stand?
A N S W E R :
There were an estim ated 200 million wireless sub-
scribers worldwide as of the end of 1997 with over 500 million project-
ed by the year 2000. With our access to technology sources and our
commitment to the industry, we believe we are poised to be a player in
this market well into the millennium.
Q U E S T I O N :
What is the growth potential for Audiovox Communications?
A N S W E R :
Very well. This first CDMA phone is being manu-
factured for us by Toshiba, which has been a manufacturing partner
for us since we started in the cellular industry. The carriers who have
tested the new CDMA phone have indicated that it follows in the same
tradition of quality that has seen several of our AMPS phones rated
number one in national consumer preference surveys.
Q U E S T I O N :
How has the new CDMA phone been received?
A N S W E R :
In ma ny count r ies thro u g ho ut the
world, the development of cellular tele-
phone serv ice takes pre c e dence over
t r ad i t ional wi rel i ne net w o rks due to
lower system costs and quicker deploy-
ment. More and more internat iona l
c a r r iers are aligning them s el ves wi t h
US carrier part ners anxious to expand their influ ence over s ea s.
Au d iovox Com mu n ic at ions Corp. with its st rong US carrier
relationships is poised to take full advantage of some of those new
partnerships.
Q U E S T I O N :
Does the international market represent a growth area
for you?
A N S W E R :
During April 1998, ACC will move to a new 70,000
sq. foot facility equipped with state-of-the-art warehousing, commu-
nications and management information systems. This building will
serve as headquarters for both Domestic and International Sales as
well as be the headquarters for our Quintex retail operation. The addi-
tional space will allow us to expand our engineering and service oper-
ations as well as provide the room to support the customer fulfillment
programs, which are an essential part of or growth plans.
Q U E S T I O N :
Your new facility is twice the size of the existing one. What
will it house?
A N S W E R :
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