Symantec 2006 Annual Report Download - page 24

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also face competition from many smaller companies that specialize in particular segments of the markets in
which we compete.
If we fail to manage our sales and distribution channels effectively or if our partners choose not to
market and sell our products to their customers, our operating results could be adversely affected.
We sell our consumer products to individuals and small offices/home offices around the world through
multi-tiered sales and distribution networks. Sales through these different channels involve distinct risks,
including the following:
Direct Sales. A significant portion of our revenues from enterprise products is derived from sales by
our direct sales force to end-users. Special risks associated with this sales channel include:
‚ Longer sales cycles associated with direct sales efforts
‚ Difficulty in hiring, retaining, and motivating our direct sales forces
‚ Substantial amounts of training for sales representatives to become productive, including regular
updates to cover new and revised products
Indirect Sales Channels. A significant portion of our revenues is derived from sales through
indirect channels, including distributors that sell our products to end-users and other resellers. This
channel involves a number of risks, including:
‚ Our lack of control over the timing of delivery of our products to end-users
‚ Our resellers and distributors are not subject to minimum sales requirements or any obligation to
market our products to their customers
‚ Our reseller and distributor agreements are generally nonexclusive and may be terminated at any
time without cause
‚ Our resellers and distributors frequently market and distribute competing products and may, from
time to time, place greater emphasis on the sale of these products due to pricing, promotions, and
other terms offered by our competitors
OEM Sales Channels. A significant portion of our revenues is derived from sales through our OEM
partners that incorporate our products into, or bundle our products with, their products. Our reliance on
this sales channel involves many risks, including:
‚ Our lack of control over the shipping dates or volume of systems shipped
‚ Our OEM partners are generally not subject to minimum sales requirements or any obligation to
market our products to their customers
‚ Our OEM partners may terminate or renegotiate their arrangements with us and new terms may
be less favorable due, among other things, to an increasingly competitive relationship with certain
partners
‚ Sales through our OEM partners are subject to changes in strategic direction, competitive risks,
and other issues that could result in reduction of OEM sales
‚ The development work that we must generally undertake under our agreements with our OEM
partners may require us to invest significant resources and incur significant costs with little or no
associated revenues
‚ The time and expense required for the sales and marketing organizations of our OEM partners to
become familiar with our products may make it more difficult to introduce those products to the
market
‚ Our OEM partners may develop, market, and distribute their own products and market and
distribute products of our competitors, which could reduce our sales
18