Audiovox 2004 Annual Report Download - page 13

The Company works closely with customers and suppliers throughout the
product design, testing and development process in an effort to meet the
expectations of consumer demand for technologically− advanced and high quality
products.
We are committed to providing high quality products and provide warranties
for all our product lines, which generally range from 90 days up to the life of
the vehicle for the original owner on some of its automobile−installed products.
To support its warranties, the Company has independent warranty centers
throughout the United States, Canada, Europe, Venezuela and Malaysia. At the
Hauppauge, New York facility, the Company has a customer service group that
provides product information, answers questions and serves as a technical
hotline for installation help for end−users and customers.
The Company's Hauppauge facility is QS−9000:1998 (ISO−9001:1994) ISO−14001:
1996 certified, which requires the monitoring of quality standards in all facets
of its business.
Suppliers
The Company has relationships with a broad group of suppliers who
manufacture its products to the Company's design specifications. The Company
works directly with its suppliers on industrial design, feature sets,
development and product testing.
The Company purchases its electronics products from manufacturers located
in several Pacific Rim countries, including Japan, China, South Korea, Taiwan,
Singapore and Malaysia. The Company also uses several manufacturers in the
United States for cruise controls, mobile video and power amplifiers. In
selecting its manufacturers, the Company considers quality, price, service and
reputation. In order to provide local supervision of supplier performance such
as price negotiations, delivery and quality control, the Company maintains
buying offices or inspection offices in Taiwan, South Korea, China and Hong
Kong. The Company generally purchases its products under short−term purchase
orders and does not have long−term contracts with its suppliers. Although the
Company believes that alternative sources of supply are currently available, an
unplanned shift to a new supplier could result in product delays and increased
cost which may have a material impact on the Company.
The Company considers relations with its suppliers to be good and
alternative sources of supply are generally available within 120 days.
Competition
The electronics industry is highly competitive across all product lines,
and the Company competes with a number of well−established companies that
manufacture and sell similar products. Brand name, design, features and price
are the major competitive factors within the electronics industry. The Company's
Mobile Electronic products compete against factory−supplied products , including
those provided by General Motors, Ford and Daimler Chrysler. The Company's
Mobile Electronics products also compete in the automotive aftermarket against
major companies such as Sony, Panasonic, Kenwood, Alpine, Directed Electronics,
Pioneer and Dual. The Company's Consumer Electronics product lines compete
against major consumer electronic companies, such as JVC, Sony, Panasonic,
Motorola, RCA, Samsung and AIWA.
Financial Information About Foreign and Domestic Operations
The amounts of net sales and long−lived assets, attributable to foreign and
domestic operations for each of the last three fiscal years are set forth in
Note 15 of the Company's consolidated financials statements, included herein.
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