Shutterfly 2012 Annual Report Download - page 11

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Please find page 11 of the 2012 Shutterfly annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

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• Specialized companies in the photo book and stationery business such as Hallmark, Cardstore
by American Greetings, Minted, Picaboo, Blurb, MyPublisher, Mixbook, MOO, Smilebox,
Creative Memories, and Photobook America;
• Photo-related software companies such as Apple, Microsoft, Corel, and FotoFlexer;
• 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 Kodak that are
seeking to expand their printer and ink businesses by gaining market share in the digital
photography marketplace;
• Social media companies that host images such as Facebook, Twitter, and Myspace;
• Photo hosting websites that allow users to upload and share images at no cost such as Picasa,
Flickr, and Photobucket; and
• Regional photography companies such as Ritz Camera that have established brands and
customer bases in existing photography markets.
We believe the primary competitive factors in attracting and retaining customers are:
• brand recognition and trust;
• quality of products and services;
• breadth of products and services;
• user affinity and loyalty;
• customer service;
• ease of use;
• convenience; and
• price.
We believe that we compete favorably with respect to many of these factors, particularly customer trust
and loyalty, quality and breadth of products and services, and customer service. Many of our competitors
promote their products on the basis of low prices or the convenience of same-day availability for digital
photos printed in drugstores or other retail outlets. Generally, we distinguish ourselves from such
competitors principally on the basis of product quality and innovation, rather than price or same-day
delivery.
Intellectual Property
Protecting our intellectual property rights is part of our strategy for continued growth and competitive
differentiation. We seek to protect our proprietary rights through a combination of patent, copyright, trade
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