Audiovox 2008 Annual Report Download - page 13

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•responding to those trends through product design and feature integration, which includes software design, electrical
engineering, industrial design and pre-production testing. In the case of OEM customers, the product development cycle
may also include product validation to customer quality standards, and
•evaluating and testing new products in our own facilities to ensure compliance with our design specifications and
standards.
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 ISO
14001:2004, ISO/TS 1649:2002 certified, which requires the monitoring of quality standards in all facets of 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, Canada, Mexico, Europe and Venezuela. We have 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, product development and testing in order to ensure that our
products are manufactured to our design specifications.
We purchase our products from manufacturers located in several Pacific Rim countries, including Japan, China, Hong Kong,
Indonesia, Malaysia, 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 Malaysia, 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 we 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 categories, and we compete with a number of well-established
companies that manufacture and sell similar products. Brand name, design, advancement of technology and features as well as price
are the major competitive factors within the electronics industry. Our Mobile Electronic products compete against factory-supplied
products, including those provided by, among others, 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 and Delphi. Our Accessories and Consumer Electronics product lines compete against major companies, such as
JVC, Sony, Panasonic, Phillips and Monster Cable.
Financial Information About Foreign and Domestic Operations
The amounts of net sales and long-lived assets, attributable to foreign and domestic operations for all periods presented are set forth in
Note 14 of the Notes to 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, but not limited to, RV's, van conversions and marine vehicles, 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.
10
Source: AUDIOVOX CORP, 10-K, May 14, 2008