Garmin 2008 Annual Report Download - page 38

16
Design and process optimization. Garmin uses its manufacturing resources to rapidly prototype design
concepts, products and processes in order to achieve higher efficiency, lower cost and better value for customers.
Garmin’s ability to fully explore product design and manufacturing process concepts has enabled it to optimize its
designs to minimize size and weight in GPS devices that are functional, waterproof, and rugged.
Logistical agility. Operating its own manufacturing facilities helps Garmin minimize problems, such as
component shortages and long component lead times which are common in the electronics industry. Many products
can be re-engineered to bypass component shortages or reduce cost and the new designs can be delivered to market
quickly. Garmin reacts rapidly to changes in market demand by striving to maintain a safety stock of long-lead
components and by rescheduling components from one product line to another.
Garmin’s design, manufacturing, distribution, and servicing processes in our US, Taiwan, and UK facilities
are certified to ISO 9001, an international quality standard developed by the International Organization for
Standardization. Garmin’s Taiwan manufacturing facilities have also achieved TS 16949 certification, a quality
standard for automotive suppliers. In addition, Garmin’s aviation operations have achieved certification to AS9100,
the quality standard for the aviation industry.
Garmin (Europe) Ltd and Garmin Corporation have also achieved certification of their environmental
management systems to the ISO14001 standard. This certification recognizes that Garmin’s UK and Taiwan
subsidiaries have systems and processes in place to minimize or prevent harmful effects on the environment and to
strive continually to improve its environmental performance.
Materials
Garmin purchases components for its products from a number of suppliers around the world. For certain
components, Garmin relies on sole source suppliers. The failure of our suppliers to deliver components in sufficient
quantities and in a timely manner could adversely affect our business.
Seasonality
Our sales are subject to significant seasonal fluctuation. Sales of our consumer products are generally
significantly higher in the fourth quarter, due to increased demand for automotive/mobile products during the
holiday buying season, and, to a lesser extent, the second quarter, due to increased demand during the spring and
summer marine season and the Father’s Day/graduation buying season. Sales of consumer products are also
influenced by the timing of the release of new products. Our aviation products do not experience much seasonal
variation, but are more influenced by the timing of the release of new products when the initial demand is typically
the strongest.
Backlog
Our sales are generally of a consumer nature and there is a relatively short cycle between order and
shipment. Therefore, we believe that backlog information is not material to the understanding of our business. We
typically ship most orders within 72 hours of receipt.
Intellectual Property
Our success and ability to compete is dependent in part on our proprietary technology. We rely on a
combination of patent, copyright, trademark and trade secret laws, as well as confidentiality agreements, to establish
and protect our proprietary rights. As of January 27, 2009, we held 307 U.S. utility patents, 77 U.S. design patents,
16 foreign patents and 26 foreign registered designs. As of January 27, 2009, we held 127 U.S. utility patent
applications, 16 U.S. design patent applications, 33 foreign patent applications, and 3 foreign design applications