Avnet 2003 Annual Report Download - page 6

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annual report2003
4
In Phoenix, Avnet Applied
Computing built the
distribution industry’s first
Class 100 clean room.
Specifically designed
for flat panel assembly
and integration,
it increases the
organization’s integration
capabilities six-fold.
Looking ahead, it appears the components market Avnet serves is gradually improving. Industry
analysts Electronic Outlook, Gartner and the Semiconductor Industry Association forecast an average
20 percent increase in semiconductor sales in calendar 2004. Avnet Electronics Marketing’s strategy
is to win a majority of its customers’ purchases by leveraging its consultative engineering services,
focused product specialization, supplier partnerships, extensive inventory and supply chain solutions to
offer them all-encompassing support, from the front end of the design process through full production.
In addition to encouraging signs in the components market, the end equipment markets served by
Avnet Computer Marketing stabilized during the fiscal year. Though our sales directly to end users suffered
throughout the technology down cycle, Avnet Computer Marketing’s distribution business performed well,
with software and storage the top growth technologies. At year-end, the Avnet Hall-Mark division led in
market share with IBM, Hewlett-Packard (HP), EMC and Oracle, the strategic suppliers that make up the
lion’s share of its business. Notably, Avnet Hall-Mark established new relationships with Microsoft and
Network Appliance, giving the Company additional operating system and storage options, respectively,
to attract and retain customers. The Avnet Enterprise Solutions division, responsible for sales to end users,
was named HP’s national storage partner of the year and continues to provide server, storage and
communications solutions featuring HP, IBM and Cisco Systems products and services.
At Avnet Applied Computing, we continued to focus on embedded systems sales to original equipment
manufacturers while reducing our presence in the highly competitive, lower-margin system builder
market. The embedded systems business grew as a percent of Avnet Applied Computing’s revenue
and profit every quarter of FY ’03 as we reduced our lower-margin, volume business. We also increased
our sales with wireless data collection equipment manufacturers Symbol Technologies and Intermec.
And, we established a relationship with LG.Philips, one of the top flat-panel display manufacturers in
the world, which complements our existing relationships with NEC, Sharp and Optrex.
Exemplifying the deep and enduring
relationships Avnet fosters with its
customers and suppliers, the Company
celebrated its 50th anniversary with ITT
Cannon and its 25th with Hewlett-Packard
(HP). In honor of the latter, HP donated
$25,000 to the Guadalupe, Ariz., Las
Fuentes Health Clinic, which Avnet and
its employees have supported through
charitable contributions for more than
seven years.