EMC 2002 Annual Report Download - page 34

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Table of Contents
If our suppliers are not able to meet our requirements, we could have decreased revenues and earnings.
We purchase or license many sophisticated components and products from one or a limited number of qualified suppliers, including some of our
competitors. These components and products include disk drives, high density memory components, power supplies and software developed and maintained
by third parties. We have experienced delivery delays from time to time because of high industry demand or the inability of some vendors to consistently meet
our quality or delivery requirements. If any of our suppliers were to cancel or materially change contracts or commitments with us or fail to meet the quality
or delivery requirements needed to satisfy customer orders for our products, we could lose time-sensitive customer orders, be unable to develop or sell certain
products cost-effectively or on a timely basis, if at all, and have significantly decreased quarterly revenues and earnings, which would have a material adverse
effect on our business, results of operations and financial condition.
Additionally, we periodically transition our product line to incorporate new technologies. The importance of transitioning our customers smoothly to
new technologies, along with our historically uneven pattern of quarterly sales, intensifies the risk that a supplier who fails to meet our quality or delivery
requirements will have a material adverse impact on our revenues and earnings.
Our business could be materially adversely affected as a result of war or acts of terrorism.
Terrorist acts or acts of war may cause damage or disruption to our employees, facilities, customers, partners, suppliers and distributors and resellers,
which could have a material adverse effect on our business, results of operations or financial condition. Such conflicts may also cause damage or disruption to
transportation and communication systems and to our ability to manage logistics in such an environment, including receipt of components and distribution of
products.
Our business may suffer if we are unable to retain or attract key personnel.
Our business depends to a significant extent on the continued service of senior management and other key employees, the development of additional
management personnel and the hiring of new qualified employees. There can be no assurance that we will be successful in retaining existing personnel or
recruiting new personnel. The loss of one or more key or other employees, our inability to attract additional qualified employees or the delay in hiring key
personnel could have a material adverse effect on our business, results of operations or financial condition.
Historically uneven sales patterns could significantly impact our quarterly revenues and earnings.
Our quarterly sales have historically reflected an uneven pattern in which a disproportionate percentage of a quarter's total sales occur in the last month
and weeks and days of each quarter. This pattern makes prediction of revenues, earnings and working capital for each financial period especially difficult and
uncertain and increases the risk of unanticipated variations in quarterly results and financial condition. We believe this uneven sales pattern is a result of many
factors including:
• the significant size of our average product price in relation to our customers' budgets, resulting in long lead times for customers' budgetary
approval, which tends to be given late in a quarter
• the tendency of customers to wait until late in a quarter to commit to purchase in the hope of obtaining more favorable pricing from one or more
competitors seeking their business
• the fourth quarter influence of customers' spending their remaining capital budget authorization prior to new budget constraints in the first quarter
of the following year
• seasonal influences
Our uneven sales pattern also makes it extremely difficult to predict near-term demand and adjust manufacturing capacity accordingly. If predicted
demand is substantially greater than orders, there will be excess
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