Audiovox 2002 Annual Report Download - page 6

Philip Christopher
President & Chief Executive Officer
Audiovox Communications Corporation
Audiovox Corporation 2002 Annual Report
FOCUS
For Audiovox Communications Corporation (ACC), 2002 brought
the evolution of the domestic wireless industry to 3G technol-
ogy platforms, further integration of wireless voice and data
technologies and continued business challenges. Audiovox
kept pace with the wireless industry, yet that pace was
slowed industry-wide due to sluggish economic conditions,
the ominous specter of looming war with Iraq and ongoing
efforts against terrorism.
The effect of the economic and business slowdown
was exacerbated by a series of product delivery problems
from ACC’s vendors, resulting in a decrease in sales. The
Company has diligently worked with its supplier group to
develop a strategy that will resolve and rectify the situation.
This plan is currently in place and has shown itself to
be effective.
Still, ACC did move forward during 2002, scoring a number of
achievements that included product and technology introduc-
tions, the opening of new markets, and the strengthen-
ing of relationships with some of the world’s leading
wireless carriers and wireless device makers.
Relationships with manufacturers such as Toshiba,
Curitel, Sharp and HTC position ACC to maximize
marketplace opportunities as they present them-
selves. In fact, Toshiba, one of the industry’s most
respected manufacturers, increased its investment
in ACC to a full 25% in 2002, and Audiovox now
offers product to selected carriers under the
Toshiba, as well as the Audiovox, brand name.
A number of “firsts” marked 2002 at ACC, as it
became the first in the U.S. to introduce a
GPS-capable phone, a Pocket PC with embed-
ded wireless voice and data, a BREW-capable
handset and a TFT color display handset. In
addition to these accomplishments, Audiovox
joined in the nationwide launches of 1X
networks for Verizon Wireless and Sprint PCS, providing
handsets and Pocket PC devices that meet the specific needs
of these next-generation networks and their subscribers. ACC
also expanded distribution throughout Latin America and
Canada with significant contracts with Bell Mobility and
TELUS Mobility, Canada’s primary telecommunications serv-
ice providers. We fully expect to expand our offerings to
these customers in the years ahead.
Fueled by our first-to-market shipments of tri-mode, Web
browsing wireless phones, Audiovox handset sales for 2002
totaled 4.9 million units and $727.7 million.
ACC also built upon the 2001 launch of its popular Maestro
Pocket PC by introducing one of the first personal digital
assistants that integrated high-speed 1X wireless data,
online and voice communications with the processing
functionality of a state-of-the-art Pocket PC. Packaged in a
single, handheld unit about the size of a 3"x5" index card the
Audiovox The
-ra/2032 broke new ground for Audiovox and
wireless carriers.
During 2002, ACC made inroads into the international market-
place as well, introducing the world’s first GSM/GPRS
Compact Flash (CF) card that enables GSM subscribers to
convert a handheld Pocket PC or PDA into a wireless commu-
nications device that facilitates voice communications and
high-speed, GPRS data transmission.
The wireless industry is evolving with record speed. The mar-
ket life of a wireless handset has been reduced from 24
months to less than one year. We know that to continue
keeping pace, Audiovox must lead the way not only in wire-
less product design and technology, but also in its ability to
respond to market conditions, assure timely product delivery
and manage inventory.
It’s an exciting era in wireless telecommunications and
Audiovox is committed to working with its manufacturing and
carrier partners to meet the challenges that lie ahead. We
invite you to join us as we strive to further connect the wire-
less world.
PHILIP CHRISTOPHER’S LETTER TO SHAREHOLDERS
A solid strategy in place to
strengthen our communications division
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