Adaptec 2011 Annual Report Download - page 8

Table of Contents
provisioning platforms, and optical transport platforms where signals are gathered, processed and transmitted to the next destination as quickly and efficiently
as possible in the metro area network. Next-generation networking equipment can handle multi-protocol, multi-service traffic and enable voice, video and data
to be moved at high speeds over the network. For high-capacity data communication over fiber optic systems, the standard used is SONET in North America
and parts of Asia, and is Synchronous Digital Hierarchy ("SDH") in the rest of the world. In addition to using SONET/SDH to increase the bandwidth or
capacity of their networks, many service providers are starting to implement packet-based transport equipment using a standard called OTN. OTN equipment
is starting to be deployed in the metro and access portions of the network. Currently, the Optical market segment represents 25% of our net revenues.
Optical products and/or applications incorporating
PMC's semiconductor solutions PMC Products Examples of OEMs(1)
Passive Optical Network
— EPON & 10G-EPON HyPHY Family Alcatel-Lucent
— GPON & XG-PON Ethernet (Framers, Mappers, MAC) Ciena
Optical Transport Network SONET/SDH Framers Cisco
— P-OTP/P-OTS Cross Connects FiberHome
— ROADM/DWDM T1/E1 Mappers/Framers Huawei
Carrier/Ethernet/Switch/Routers DS-3/E3 Mappers/Framers Juniper
Multi-service switches Nokia Siemens
— MSPP/MSTP/ADM Tellabs
ZTE
(1) Examples in the order listed refer to Alcatel-Lucent, S.A., Ciena Corp., Cisco Systems, Inc., Fiberhome Telecommunication Technologies Co., Ltd.,
Huawei Technology Co. Ltd., Juniper Networks, Inc., Nokia Corporation, Tellabs Inc., and ZTE Corporation
SALES, MARKETING AND DISTRIBUTION
Our sales and marketing strategy is to have our products designed into our customers' equipment by developing superior products for which we provide
best-in-class service and technical support. Our marketing team is focused on developing new products and solutions that meet the needs of our customers,
including OEMs and original design manufacturers. We are often involved in the early stages of design concerning our customers' plans for new equipment.
This helps us determine if our existing products can be used in their new equipment or if new devices need to be developed for the application. To assist us in
our planning process, we are in regular contact with our key customers to discuss industry trends, emerging standards and ways in which we can assist in their
new product requirements.
Our sales team is focused on selling and supporting our chips and chipsets for equipment providers who are in turn selling their products to service
providers, enterprises, or consumers. To better match our available sales resources to market opportunities, we also focus our sales and support efforts on
targeted customers.
We sell our products to end customers directly and through distributors and independent manufacturers' representatives. In 2011, approximately 30% of
our orders were shipped through distributors, approximately 55% were sent by us directly to contract manufacturers selected by OEMs, and the balance were
sent directly to our OEM customers.
In 2011, our largest distributor was Avnet Inc. ("Avnet"), which sold our products worldwide (excluding Japan, Israel, and Taiwan). In 2011, sales
shipped through Avnet worldwide represented 12% of our total net revenues. Our second largest distributor is Macnica Inc. Sales shipped through this
distributor in 2011 represented 11% of our total net revenues.
In 2011, we had two end customers, HP and EMC, which each accounted for more than 10% of our net revenues.
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