SanDisk 2014 Annual Report Download - page 77

•Mobile and Connected Applications. We provide embedded and removable storage for mobile and
connected applications. We are a leading supplier of microSD removable storage cards and
embedded products, such as iNAND, MCP iNAND and custom solutions, for use in phones,
tablets, notebooks, global positioning system, or GPS, devices, eReaders, wearable products and
other mobile or computing devices. Multimedia features in mobile products that enable imaging,
high-definition, or HD, videos, gaming and other applications have driven significantly increased
demand for flash storage solutions in these devices. We also provide removable storage cards and
embedded storage solutions for use in automotive and connected home applications.
•Consumer Electronics. We provide flash storage solutions to multiple consumer markets, including
imaging, USB drive, gaming, audio/video and others. Flash storage solutions are used in digital
cameras for high-resolution still images and video, and in solid-state digital camcorders for
high-resolution video. Gaming consoles and portable game devices now include advanced features
that require high-capacity embedded or removable storage solutions, and we offer solutions that are
specifically packaged for the gaming market. Our USB flash drives allow consumers to store and
transfer files, pictures and music on keychain-sized devices. We sell a line of digital media players
with both embedded and removable NAND flash under our Sansa brand with varying combinations
of audio and video capabilities. We also sell a line of wireless media drives under our Connect brand
that provide wireless streaming of content to computers and mobile products. Primary removable
card formats for consumer devices include CompactFlash, SD and microSD.
Our Sales Channels
Our revenue is generated through the following channels:
•Commercial. Our Commercial channel represents sales directly and through distributors to OEMs,
system integrators and value-added resellers who bundle, embed or integrate our flash storage
solutions. Our Commercial channel addresses a large variety of applications, including mobile
phones, tablets, notebooks, gaming devices, enterprise storage solutions, servers and other
computing devices. Within our enterprise business, both our sales and technical resources are
increasingly engaged alongside our OEM and other partners to address end-customer requirements
and generate demand. Our Commercial channel sales also include sales made directly to enterprise
customers. We also sell our data storage solutions to customers in our Commercial channel that
offer our products under their own brand name in retail channels. We generate license and royalty
revenue related to intellectual property, or IP, and this revenue is also included in our Commercial
revenue.
•Retail. We sell our products directly and through distributors to consumer electronics stores, office
superstores, mobile phone stores, mass merchants, e-commerce retailers, catalog and mail order
companies, drug stores, supermarkets, convenience stores and kiosks in a wide variety of locations.
Backlog
As of the end of fiscal years 2014 and 2013, our backlog was $305 million and $296 million,
respectively. Because our customers can generally change or cancel orders with limited or no penalty and
limited advance notice prior to shipment, we do not believe that our backlog, as of any particular date, is
indicative of future sales.
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Annual Report