Shutterfly 2009 Annual Report Download - page 16
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Production system.
We operate our own production facility in Charlotte, North Carolina. In January 2009, we closed our Hayward,
California facility and we are configuring a new facility in Phoenix, Arizona that is expected to begin operations in the second quarter of
2009. Our automated production system controls our production processes, including order management and pick, pack and ship
operations. Using proprietary algorithms, the production system analyzes tens of thousands of orders daily and automates the workflow
into our high-volume silver halide photofinishing machines and our state-of-the-art digital offset presses.
Competition
The market for digital photography products and services is large, evolving and intensely competitive, and we expect competition to
increase in the future. We face intense competition from a wide range of companies, including the following:
•
online digital photography services companies such as Kodak EasyShare Gallery (formerly known as Ofoto), Snapfish, which is a
service of Hewlett
-
Packard, American Greetings
’
Photoworks and Webshots brands, and others;
•
“
Big Box
”
retailers such as Wal
-
Mart, Costco and others that are seeking to offer low cost digital photography products and services.
These competitors provide in-store fulfillment and self-
service kiosks for printing, which may, among other strategies, offer their
customers heavily discounted in
-
store products and services that compete directly with our offerings;
•
drug stores such as Walgreens, CVS and others that offer in
-
store pick
-
up from Internet orders;
•
regional photography companies such as Ritz Camera that have established brands and customer bases in existing photography markets;
•
Internet portals and search engines such as Yahoo!, AOL, and Google that offer broad
-
reaching digital photography and related
products and services to their large user bases;
•
home printing service providers such as Hewlett
-
Packard, Epson, Canon, and Fuji that are seeking to expand their printer and ink
businesses by gaining market share in the emerging digital photography marketplace;
•
photo
-
related software companies such as Apple, Microsoft and Corel;
•
social media companies that host images such as MySpace, Facebook and Hi5; and
•
specialized companies in the photo book and stationery business such as Hallmark, American Greetings, Tiny Prints, Picaboo and
Blurb.
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