Ingram Micro 2008 Annual Report Download - page 17

regions. We also receive compensation for various services, including technical support, financial services, sales
and marketing services, eCommerce services, licensing solutions and managed services.
Although services represent one of the initiatives of our long-term strategy, they have represented less than
10% of our annual revenues in the past and may not exceed that level in the near term.
Suppliers
Our worldwide suppliers include leading computer hardware suppliers, networking equipment suppliers,
software publishers, CE manufacturers, and AIDC/POS suppliers, such as Acer; Adobe; Advanced Micro Devices
Inc.; APC; Apple; Autodesk; Asus; Belkin; Brother; Canon USA, Inc.; Cisco; Citrix; CA; Emerson Network Power
(India) Private Limited; Epson; Fujitsu Siemens Computers; Google; Haier; Hewlett-Packard; Hitachi GST; IBM;
InFocus; Intel; Juniper Networks; Kingston Technology; Lenovo; Lexmark; LG Electronics; Logitech; McAfee;
Microsoft; Motorola; NEC Display Solutions; Nortel; Panasonic; Philips; Pioneer; Polycom; Printronix; Samsung;
SanDisk; Seagate; Sonic Wall; Sony; Sony Ericsson; Sun Microsystems; Symantec; Targus; Trend Micro; Toshiba;
ViewSonic Corporation; VMware; Websense; Western Digital; Xerox; and Zebra. Products purchased from
Hewlett-Packard generated approximately 23%, 23%, and 22% of our net sales in fiscal years 2008, 2007 and
2006, respectively. There were noother vendorsthat represented 10% or more of our net sales in any of the last three
years.
Our suppliers generally warrant the products we distribute and allow returns of defective products, including
those returned to us by our customers. We generally do not independently warrant the products we distribute;
however, local laws might impose warranty obligations upon distributors (such as in the case of supplier
liquidation). In certain markets we administer extended warranty programs, supported by a third party, on supplier
products. We do warrant services, products that we build-to-order from components purchased from other sources,
and our own branded products. Provision for estimated warranty costs is recorded at the time of sale and
periodically adjusted to reflect actual experience. Historically, warranty expense has not been material.
We have written distribution agreements with many of our suppliers; however, these agreements usually
provide for nonexclusive distribution rights and often include territorial restrictions that limit the countries in which
we can distribute the products. The agreements also are generally short term, subject to periodic renewal, and often
contain provisions permitting termination by either party without cause upon relatively short notice. Certain
distribution agreements either require (at our option) or allow for the repurchase of inventory upon termination of
the agreement. Even in cases where suppliers are not obligated to accept inventory returns upon termination certain
suppliers will elect to repurchase the inventory while other suppliers will either assist with liquidation or resale of
the inventory.
Competition
Each region in which we operate (North America, EMEA, Asia-Pacific and Latin America) is highly
competitive. In the current economic environment, competitive pressure in the form of aggressive pricing is more
acute. In addition to price, other competitive factors include:
• ability to tailor specific solutions to customer needs;
• availability of technical and product information;
• credit terms and availability;
• effectiveness of sales and marketing programs;
• products and services availability;
• quality and breadth of product lines and services;
• speed and accuracy of delivery; and
• web- or call center-based sales.
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