Radio Shack 2008 Annual Report Download - page 13

“Quarterly Data (Unaudited)” in the Notes to Consolidated Financial Statements for data showing seasonality
trends. We expect this seasonality to continue.
PATENTS AND TRADEMARKS
We own or are licensed to use many trademarks and service marks related to our RadioShack stores in
the United States and in foreign countries. We believe the RadioShack name and marks are well
recognized by consumers, and that the name and marks are associated with high-quality products and
services. We also believe the loss of the RadioShack name and RadioShack marks would have a material
adverse impact on our business. Our private brand manufactured products are sold primarily under the
RadioShack, Accurian or Gigaware trademarks. We also own various patents and patent applications
relating to consumer electronics products.
We do not own any material patents or trademarks associated with our kiosk operations.
SUPPLIERS AND NAME BRAND RELATIONSHIPS
Our business strategy depends, in part, upon our ability to offer name brand and private brand products,
as well as to provide our customers access to third-party services. We utilize a large number of suppliers
located in various parts of the world to obtain raw materials and private brand merchandise. We do not
expect a lack of availability of raw materials or any single private brand product to have a material impact
on our operations overall or on any of our operating segments. We have formed vendor and third-party
service provider relationships with well-recognized companies such as Sprint Nextel, AT&T, Apple, Casio,
Duracell, Garmin, Hewlett-Packard, Microsoft, Mio, RIM, Samsung, and SanDisk. In the aggregate, these
relationships have or are expected to have a significant impact on both our operations and financial strategy.
Certain of these relationships are important to our business; the loss of or disruption in supply from these
relationships could have a material adverse effect on our net sales and operating revenues. Additionally,
we have been limited from time to time by various vendors and suppliers on an economic basis where
demand has exceeded supply.
ORDER BACKLOG
We have no material backlog of orders in any of our operating segments for the products or services that we
sell.
COMPETITION
Due to consumer demand for wireless products and services, as well as rapid consumer acceptance of
new digital technology products, the consumer electronics retail business continues to be highly
competitive, driven primarily by technology and product cycles.
In the consumer electronics retailing business, competitive factors include price, product availability,
quality and features, consumer services, manufacturing and distribution capability, brand reputation and
the number of competitors. We compete in the sale of our products and services with several retail
formats including national, regional, and independent consumer electronics retailers. We compete with
department and specialty retail stores in more select product categories. We compete with wireless
providers in the wireless telephone category through their own retail and online presence. We compete
with mass merchandisers and other alternative channels of distribution, such as mail order and e-
commerce retailers, on a more widespread basis. Numerous domestic and foreign companies also
manufacture products similar to ours for other retailers, which are sold under nationally-recognized brand
names or private brands.
Management believes we have two primary factors differentiating us from our competition. First, we have
an extensive physical retail presence with convenient locations throughout the United States. Second, our
specially trained sales staff is capable of providing cost-effective solutions for our customers’ routine
electronics needs and distinct electronics wants, assisting with the selection of appropriate products and
accessories and, when applicable, assisting customers with service activation.
We cannot give assurance that we will compete successfully in the future, given the highly competitive
nature of the consumer electronics retail business. Also, in light of the ever-changing nature of the
consumer electronics retail industry, we would be adversely affected if our competitors were able to offer
their products at significantly lower prices. Additionally, we would be adversely affected if our competitors
were able to introduce innovative or technologically superior products not yet available to us, or if we were
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