D-Link 2010 Annual Report Download - page 3

CHALLENGES AND OPPORTUNITIES
2010 was another challenging year as markets around the
world continued to grapple with economic recovery.
Although the second half of 2010 saw improvements
overall, the beginning of the year included obstacles such
as the shortage of factory workers in China and the
scarcity of microchips and other critical materials.
Multiple disruptive factors such as the debt crisis,
currency volatility, and climate anomalies all served to
deepen marketplace uncertainty. Economies in Europe,
North America, and other major markets continued to
struggle with high unemployment rates and weak
consumer spending. Fortunately, the cloud of economic
turmoil in many emerging markets has lifted. D-Link’s
rigorous infrastructure, accountable scal policies, and
reliable brand image has allowed us to take full
advantage of the favorable conditions in these regions.
These factors, coupled with ongoing technical
innovation, consistent product quality, and excellent
operational eciency helped D-Link to maintain stable
revenue growth. Subsequently, prot rebounded
strongly over last year.
FINANCIAL PERFORMANCE
In 2010, D-Link’s consolidated revenue totaled NT$33.86
billion, up 9.2% over the previous year. Operating income
grew to NT$975 million, up 147% over the previous year.
Net prot after tax was NT$1.22 billion, compared to the
previous year's NT$511 million, a signicant growth of
139%. Prot status has outshined the shadow cast by the
prevailing nancial turmoil abroad. Global consolidated
revenue in US dollars came in at US$1.069 billion
compared with US$938 million in 2009, a stable growth
of 13.8%. A combined gross margin of 31.2% was seen in
2010, similar to the 31% from 2009. Still, operating prot
margin was up to 2.9% from 1.3% last year due to
economies of scale, a 1.6% improvement. Annual earnings
per share showed an increase from 0.79 to 1.89. Overall
operating performance was in line with expectations.
MARKET SHARE
D-Link’s annual switch shipments totaled approximately
62.7 million ports, a growth of 10.6% over 2009. According
to Gartner, D-Link retained its number one ranking in the
small business market based on enterprise Ethernet switch
ports shipped with a worldwide market share of 38.5% in
2010. In the midsize and large enterprise market for 2010,
D-Link’s market share based on ports shipped reached
13.2%, for a ranking of third place worldwide. Wireless
devices totaled approximately 1,784 million units shipped.
This is a growth of 42.2% over the previous year. According
to Gartner, within the small business and midsize and large
enterprise markets for WLAN stand-alone access points,
D-Link had worldwide market shares of 30.4% and 25.4%
respectively in 2010. Additionally, the broadband telecom
product line achieved annual shipments of 1,791 million
units, growing 64.5% over last year. Based on product line,
wireless products accounted for 41.5% of annual turnover,
followed by 28.3% for switches, 20.4% for broadband
telecom, and 7.6% for digital home.
INNOVATION
D-Link remains a leading brand of global consumer
networking products for the digital home. The design
community has acknowledged D-Link’s innovation with
multiple awards and distinctions. Perhaps most notably,
the acclaimed and groundbreaking Boxee Box won over 15
awards, including Best in Show at CES 2010. The DIR-685
Xtreme N Storage Router also won coveted awards
including the “red dot” Design Award as well as the Good
Design Award.
CHARLEY CHANG
Chairman
D-Link Group
TONY TSAO
Chief Executive Ocer
D-Link Group
Letter to Shareholders, Customers,
Partners, and Employees
02 | D-Link Corporation | Annual Report 2010