Garmin 2010 Annual Report Download - page 31

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own manufacturing facilities also allows Garmin to quickly adjust the mix of product production, helping to foster
faster delivery response to the customer.
Gais desig, aufatuig, distiutio, ad seiig poesses i ou US, Taia, ad UK failities
are certified to ISO 9001, an international quality standard developed by the International Organization for
Stadadizatio. Gais Taia aufatuig failities hae also ahieed TS  etifiatio, a ualit
stadad fo autootie supplies. I additio, Gais aiatio opeatios hae ahieed etifiatio to
AS9100, the quality standard for the aviation industry.
Garmin (Europe) Ltd and Garmin Corporation have also achieved certification of their environmental
aageet sstes to the ISO stadad. This etifiatio eogizes that Gais UK ad Taia
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
Although most components essential to Gais business are generally available from multiple sources,
certain key components, including, but not limited to, microprocessors, certain liquid crystal displays LCDs, and
certain application-speifi itegated iuits ASICs ae uetl otaied  the Company from single or
limited sources, which subjects Garmin to supply and pricing risks. Many of these and other key components that
are available from multiple sources, including, but not limited to, NAND flash memory, dynamic random access
eo DRAM, GPS hipsets ad etai LCDs, are subject at times to industry-wide shortages and commodity
pricing fluctuations.
Garmin and other participants in the personal computer, mobile communication, aviation electronics and
consumer electronics industries also compete for various components with other industries that have experienced
increased demand for their products. In addition, Garmin uses some custom components that are not common to
the rest of the personal computer, mobile communication and consumer electronics industries, and new products
introduced by the Company often utilize custom components available from only one source until Garmin has
evaluated whether there is a need for, and subsequently qualifies, additional suppliers. When a component or
product uses new technologies, iitial apait ostaits a eist util the supplies ields hae matured or
manufacturing capacity has increased. Garmin makes efforts to manage risks in these areas through the use of
supply agreements for strategically important components. Nevertheless, if Gais supply of a key single-
sourced component for a new or existing product were delayed or constrained, if such components were available
only at significantly higher prices, or if a key manufacturing vendor delayed shipments of completed products to
Garmin, the Gais financial condition and operating results could be materially adversely affected. Garmins
business and financial performance could also be adversely affected depending on the time required to obtain
sufficient quantities from the original source, or to identify and obtain sufficient quantities from an alternative
source. Continued availability of these components at acceptable prices, or at all, may be affected if those
suppliers decided to concentrate on the production of common components instead of components customized to
meet the Garmins requirements
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
sue aie seaso ad the Fathes Da/gaduatio uig seaso. Sales of onsumer 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.