EMC 2004 Annual Report Download - page 36

Download and view the complete annual report

Please find page 36 of the 2004 EMC annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 128

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128

Table of Contents
FACTORS THAT MAY AFFECT FUTURE RESULTS
This Annual Report on Form 10-K contains forward-looking statements, within the meaning of the Federal securities laws, about our business and
prospects. The forward-looking statements do not include the potential impact of any mergers, acquisitions, divestitures or business combinations that may be
completed after the date hereof. Our future results may differ materially from our past results and from those projected in the forward-looking statements due
to various uncertainties and risks, including but not limited to those set forth below, one-time events and other important factors disclosed previously and from
time to time in our other filings with the SEC. We disclaim any obligation to update any forward-looking statements contained herein after the date of this
Annual Report.
Our business could be materially adversely affected as a result of general economic and market conditions.
We are subject to the effects of general global economic and market conditions. If these conditions deteriorate, our business, results of operations or
financial condition could be materially adversely affected.
Our business could be materially adversely affected as a result of a lessening demand in the information technology market.
Our revenue and profitability depend on the overall demand for our products and services. Delays or reductions in IT spending, domestically or
internationally, could materially adversely affect demand for our products and services which could result in decreased revenues or earnings.
Component costs, competitive pricing, and sales volume and mix could materially adversely affect our revenues, gross margins and earnings.
Our gross margins are impacted by a variety of factors, including competitive pricing, component and product design costs as well as the volume and
relative mixture of product and services revenues. Increased component costs, increased pricing pressures, the relative and varying rates of increases or
decreases in component costs and product price, changes in product and services revenue mixture or decreased volume could have a material adverse effect on
our revenues, gross margins or earnings.
The costs of third party components comprise a significant portion of our product costs. While we generally have been able to manage our component and
product design costs, we may have difficulty managing such costs if supplies of certain components become limited or component prices increase. We
currently expect that the availability of certain disk drives will be limited in the first half of 2005 so we may experience an increase in our component costs.
An increase in component or design costs relative to our product prices could have a material adverse effect on our gross margins and earnings. Moreover,
certain competitors may have advantages due to vertical integration of their supply chain, which may include disk drives, microprocessors, memory
components and servers.
The markets in which we do business are highly competitive and we encounter aggressive price competition for all of our products and services from
numerous companies globally. There also has been and may continue to be a willingness on the part of certain competitors to reduce prices or provide storage-
related products or services, together with other IT products or services, at minimal or no additional cost in order to preserve or gain market share. Such price
competition may result in pressure on our product prices and reductions in product prices may have a material adverse effect on our revenues, gross margins
and earnings. We currently believe that pricing pressures are likely to continue.
33