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Table of Contents
by the global economic slowdown and increased levels of competition. The increase in 2001 compared to 2000 was primarily due to greater demand for
storage software on both newly shipped and already installed systems and the successful introduction of new and enhanced software products. Continued
negative trends in the economy, further reductions in information technology spending, increased levels of competition or continued pricing pressures may
continue to negatively impact information storage systems and software revenues in 2003.
Information storage services revenues were $1,078.4, $972.3 and $612.1 in 2002, 2001 and 2000, respectively, representing increases of $106.1, or
11%, from 2001 to 2002, and $360.2, or 59%, from 2000 to 2001. The increases were primarily due to a greater volume of professional services, largely to
support and implement automated networked storage solutions. Additionally, the increases were due to a growth in maintenance revenues associated with a
greater number of both software and hardware maintenance contracts.
Total information storage revenues were $5,296.8, $6,839.5 and $8,293.0 in 2002, 2001 and 2000, respectively, representing decreases of $1,542.7, or
23%, from 2001 to 2002, and $1,453.5, or 18%, from 2000 to 2001.
Other businesses revenues were $141.6, $251.1 and $579.8 in 2002, 2001 and 2000, respectively, representing decreases of $109.5, or 44%, from 2001
to 2002, and $328.7, or 57%, from 2000 to 2001. Other businesses revenues consist of revenues from AViiON server products and related services. Included
in the 2001 and 2000 amounts were revenues from AViiON server products of $48.4 and $286.1, respectively. In the third quarter of 2001, EMC stopped
selling AViiON server products. Accordingly, other businesses revenues for the last quarter of 2001, all of 2002 and future years are and will be comprised
only of AViiON services revenues. These revenues are expected to continue to decline in future years.
Revenues on sales into the North American markets were $3,225.4, $4,185.4 and $5,436.2 in 2002, 2001 and 2000, respectively, representing decreases
of $960.0, or 23%, from 2001 to 2002, and $1,250.8, or 23%, from 2000 to 2001. Revenues on sales into the European, Middle East and African markets were
$1,327.8, $1,774.9 and $2,351.8 in 2002, 2001 and 2000, respectively, representing decreases of $447.1, or 25%, from 2001 to 2002, and $576.9, or 25%,
from 2000 to 2001. Revenues on sales into the Asia Pacific markets were $769.8, $893.4 and $880.1 in 2002, 2001 and 2000, respectively, representing a
decrease of $123.6, or 14%, from 2001 to 2002, and an increase of $13.3, or 2%, from 2000 to 2001. Revenues on sales into the Latin American markets were
$115.4, $237.0 and $204.7 in 2002, 2001 and 2000, respectively, representing a decrease of $121.6, or 51%, from 2001 to 2002, and an increase of $32.3, or
16%, from 2000 to 2001.
The decline in revenues in all markets in 2002 and in the North American and European, Middle East and African markets in 2001 was attributable to
the global economic slowdown that began in 2001 and continued throughout 2002, which led to a reduction in information technology spending. Increased
levels of competition, including competitive pricing pressures, also had an adverse effect on revenues. The decline in the Latin American markets in 2002 was
further impacted by the region's political and currency instability. The increase in revenues in 2001 compared to 2000 in the Asia Pacific and the Latin
American markets resulted from our efforts to expand our sales infrastructure throughout these regions to meet demand for information storage products and
services. While revenues increased in these markets, the increases were lower than anticipated due to the aforementioned factors causing the decline in
revenues in the other regions.
The provision for sales returns was $158.6 in 2002, $635.9 in 2001 and $256.7 in 2000. At the time of sale, we provide for the potential returns of
systems as a reduction of revenue. We estimate the amount of returns based upon our historical experience, specific identification of probable returns and
current market and economic conditions. The decrease in the provision for sales returns in 2002 compared to 2001 was attributable to a decline in revenue and
a reduction in the level of returns experienced in 2002 compared to 2001. The increase in the provision for sales returns in 2001 compared to 2000 was
attributable to an increase in the level of returns experienced in 2001 over 2000. In 2001, various segments of our customer base to which we sell both directly
and indirectly, including telecommunication providers and Internet-related businesses, experienced dramatic declines
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