Avid 2000 Annual Report Download - page 15

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We market and sell our solutions through a combination of direct and indirect sales channels, covering a range of
industries that Make, Manage and Move Media in the United States, Europe, Asia and throughout the world.
From our traditional stronghold in the high-end post-production market to broadcast news, low-cost post-
production, and streaming media solutions, we ensure balanced market and geographic sales coverage. Our products are
sold primarily through a network of more than 450 independent distributors, value-added resellers and dealers. These
channels are supplemented by a team of Avid sales representatives directly serving select customers and markets.
We also provide both direct and indirect customer support. Our customers are served directly through regional
telephone support centers and major-market field service representatives, supplemented by strategically located dealers,
value-added resellers and authorized third-party service providers. Customers may choose from a variety of support
offerings, including 24 hour telephone support, quick-response on-site assistance, hardware replacement and software
upgrades. Customer training is available directly from us or through field-based authorized third-party Avid training
centers.
MANUFACTURING AND SUPPLIERS
Our manufacturing operations consist primarily of the testing of subassemblies and components purchased from
third parties, the duplication of software, and the configuration, assembly and testing of board sets, software, related
hardware components, and complete systems. We also rely on independent contractors to manufacture components and
subassemblies to our specifications. Our systems undergo testing and quality assurance at the final assembly stage.
We are dependent on a number of sole source vendors for certain key hardware components of our products.
These components include: (i) video compression chips manufactured by C-Cube Microsystems; (ii) a small computer
systems interface (SCSI) accelerator board from ATTO Technology; (iii) a 3D digital video effects board from Pinnacle
Systems; (iv) application specific integrated circuits (ASICS) from Chip Express and LSI Logic; (v) digital signal
processing integrated circuits from Motorola; (vi) a fibre channel adapter card from JNI; (vii) a fibre channel storage array
from the Clariion division of EMC; (viii) a PCI expansion chassis from SBS Technologies, Inc.; (ix) a fixed programmable
gate array from Quicklogic; (x) digital to analog and analog to digital converter integrated circuits from Cirrus Logic;
(xi) a
peripheral component interconnect bridge integrated circuits from Intel Corp.; and (xii) analog switches and op amps from
Analog Devices. (The Company also manufactures certain circuit boards under license from a subsidiary of Pinnacle
Systems.) For the risks associated with our reliance upon certain vendors, please see "Certain Factors that May Effect
Future Results" below.
We have manufacturing facilities in Tewksbury, Massachusetts; Dublin, Ireland; Boulder, Colorado; Madison,
Wisconsin; and Palo Alto and Menlo Park, California. The Company has also contracted with third-party manufacturing
facilities for certain component parts.
RESEARCH AND DEVELOPMENT
Our research and development efforts are focused on the development of digital media content-creation tools and
workgroup solutions that operate on Windows NT-based, IRIX-based, and Apple computers. This includes the
development and enhancement of best-in-class video, film, 3-D animation, and audio editing systems to meet the needs of
professionals in the television, film, music, broadcast news production, and industrial post-production markets, and of end-
users in the educational and corporate markets. As these digital tools proliferate, all-digital production cycles are becoming
possible. Our research and development efforts therefore also include networking and storage initiatives to deliver
standards-based media transfer and media asset management tools, as well as standalone and network-attached media
storage systems for workgroups. Increasingly, we design our systems to be Internet-enabled with technology for encoding
and streaming media to the Internet. Our research and development operations are in Tewksbury, Massachusetts; Palo Alto,
Santa Clara, and Santa Monica, California; Boulder, Colorado; Madison, Wisconsin; and Montreal, Canada.
COMPETITION
The markets for our products are highly competitive and subject to rapid change. Competition is fragmented with
a large number of suppliers providing different types of products to different markets.