CompUSA 2007 Annual Report Download - page 50

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7
We provide extensive technical telephone support to our Systemax and Ultra brand PC customers. We
maintain a database of commonly asked questions for our technical support representatives, enabling
them to respond quickly to similar questions. We conduct regular on-site training seminars for our sales
representatives to help ensure that they are well trained and informed regarding our latest product
offerings.
Suppliers
We purchase the majority of our products and components directly from manufacturers and large
wholesale distributors. During 2007 and 2006, Ingram Micro accounted for 14.4% and 12.8% of our
purchases. During 2005, no vendor accounted for more than 10% of our purchases. The loss of this
vendor, or any other key vendors, could have an adverse effect on us.
Certain private label products are manufactured by third-parties to our specifications. Many of these
private label products have been designed or developed by our in-house product design and development
teams.
Competition and Other Market Factors
Technology Products
The North American and European technology product markets are highly competitive, with many U.S.,
Asian and European companies vying for market share. There are few barriers of entry, with these
products being sold through the direct market channel, mass merchants, over the internet and by computer
and office supply superstores.
Timely introduction of new products or product features are critical elements to remaining competitive.
Other competitive factors include product performance, quality and reliability, technical support and
customer service, marketing and distribution and price. Some of our competitors have stronger brand-
recognition, broader product lines and greater financial, marketing, manufacturing and technological
resources than us. Additionally, our results could also be adversely affected should we be unable to
maintain our technological and marketing arrangements with other companies, such as Microsoft®,
Intel® and Advanced Micro Devices®.
The North American technology products market is highly fragmented and characterized by multiple
channels of distribution including direct marketers, local and national retail computer stores, computer
resellers, mass merchants, computer and office supply "superstores" and internet-based resellers. In
Europe, our major competitors are regional or country-specific retail and direct-mail distribution
companies and internet-based resellers.
With conditions in the market for technology products remaining highly competitive, continued
reductions in retail prices may adversely affect our revenues and profits. Additionally, we rely in part
upon the introduction of new technologies and products by other manufacturers in order to sustain long-
term sales growth and profitability. There is no assurance that the rapid rate of such technological
advances and product development will continue.