Avid 1998 Annual Report Download - page 13

8
In the video and film editing and effects markets, Avid encounters competition primarily from vendors that offer similar
digital production and post-production editing products based on standard computer platforms. Avid also competes with
vendors that offer editing and effects products for originators of broadcast news. These companies include Discreet Logic,
Kinetix (a subsidiary of Autodesk), Media 100 (formerly known as Data Translation, Inc.), Quantel (a subsidiary of Carlton
Communications PLC), Alias/Wavefront (a subsidiary of Silicon Graphics), Panasonic (a subsidiary of Matsushita) and
Sony. Avid also competes with vendors, such as Sony and Matsushita, that generally have offered analog-based products.
Avid expects that competition from these vendors will increase to the extent that such vendors develop and introduce digital
media products as well as new versions of their analog products.
In the professional audio markets, the Company competes primarily with traditional analog and digital recording and/or
mixing system suppliers including Alesis, Euphonix, Mackie, and Yamaha as well as other disk-based digital audio system
suppliers including Fairlight, Roland, Steinberg, Studio/Audio/Video (SADie), and others. In addition, companies such as
Creative Technology currently provide low cost (under $500) digital audio playback cards targeted primarily at the personal
computer game market. There can be no assurance that these companies will not introduce products that are more directly
competitive with the Company’ s products.
The Company may face competition in any or all of these markets in the future from computer manufacturers, such as
Compaq, Hewlett-Packard, IBM, and Silicon Graphics, as well as from software vendors, such as Oracle and Sybase. All of
these companies have announced their intentions to enter some or all of the Company’ s target markets, including
specifically the broadcast news and special effects sectors of the video and film editing and effects market. In addition,
certain developers of shrink-wrapped digital media software products, such as Adobe and Macromedia, either offer or have
announced video and audio editing products which may compete with certain of the Company’ s products.
The primary competitive factors in all of the Company’ s market sectors are price/performance, functionality, product
quality, reputation, product line breadth, access to distribution channels, customer service and support, brand name
awareness, and ease of use.
EMPLOYEES
The Company employed 1,929 people as of December 31, 1998.
ITEM 2. PROPERTIES
The Company’ s principal administrative, sales and marketing, research and development, support, and manufacturing
facilities are located in three buildings adjacent to one another in an office park located in Tewksbury, Massachusetts. The
Company's leases on such buildings expire in June 2010.
The Company also leases a facility in Dublin, Ireland, for the manufacture and distribution of its products and in Palo Alto,
California, which houses Digidesign headquarters and certain other research and development operations.
Additionally, the Company leases a facility in Montreal, Canada, which houses certain administrative, research and
development, and support operations.
In September 1995, the Company's United Kingdom subsidiary entered into a 15-year lease in London, England.
The Company also maintains sales and marketing support offices in leased facilities in various other locations throughout
the world.
See Note K - "Commitments and Contingencies" in the Notes to Consolidated Financial Statements for information
concerning the Company's obligations under all operating leases as of December 31, 1998.
The Company anticipates no difficulty in retaining occupancy of any of its manufacturing, office or sales and marketing
support facilities through lease renewals prior to expiration or through month-to-month occupancy, or in replacing them
with equivalent facilities.
ITEM 3. LEGAL PROCEEDINGS
Data Translation, Inc.