Audiovox 2005 Annual Report Download - page 14

We work 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. Our
Hauppauge, New York 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.
We are committed to providing product 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 automobile−installed products. To support our warranties,
we have independent warranty centers throughout the United States, Europe and
Venezuela. 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.
SUPPLIERS
We work directly with our suppliers on industrial design, feature sets,
development and product testing in order to manufacture our products to certain
design specifications.
We purchase our products from manufacturers located in several Pacific Rim
countries, including Japan, China, Malaysia, South Korea, Taiwan, Singapore and
the United States. In selecting our manufacturers, we consider quality, price,
service and reputation. In order to provide local supervision of supplier
performance such as price negotiations, delivery and quality control, we
maintain buying offices or inspection offices in Taiwan, South Korea, China and
Hong Kong. We consider relations with our suppliers to be good and alternative
sources of supply are generally available within 120 days. We do not have
long−term contracts with our suppliers and generally purchase our products under
short−term purchase orders. Although we believe that our 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
our operations.
COMPETITION
The electronics industry is highly competitive across all product lines,
and we compete 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. Our Mobile Electronic
products compete against factory−supplied products, including those provided by
General Motors, Ford and Daimler Chrysler. Our Mobile Electronic products also
compete in the automotive aftermarket against major companies such as Sony,
Panasonic, Kenwood, Alpine, Directed Electronics, Pioneer, Dual and Delphi. Our
Consumer Electronics product lines compete against major companies, such as JVC,
Sony, Panasonic, RCA 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 consolidated financials statements, included herein.
EQUITY INVESTMENT
We have a 50% non−controlling ownership interest in Audiovox Specialized
Applications, Inc. ("ASA") which acts as a distributor to specialized markets
for specialized vehicles, such as RV's and van conversions, of televisions and
other automotive sound, security and accessory products. The goal of this equity
investment is to blend financial and product resources with local operations in
an effort to expand our distribution and marketing capabilities.
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