Ingram Micro 2010 Annual Report Download - page 16

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2008, respectively. There were no other vendors that 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 for 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 may 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. In cases where suppliers are not obligated to accept inventory returns upon termination, some
suppliers will nevertheless 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 acute.
In addition to pricing, 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
• availability of web- or call center-based sales.
We compete against broad-based IT distributors such as Tech Data and Synnex Corporation. There are a
number of specialized competitors that focus upon one market or product or a particular sector with whom we
compete. Examples include Avnet and Arrow in components and enterprise products; Westcon in networking and
security; D&H Distributing, ADI, ArchBrook Laguna and Petra in consumer electronics; ScanSource and Bluestar
in AIDC/POS products; and Brightpoint, Brightstar and 20:20 Mobile Group Limited in mobility products. While
we face some competitors in more than one region, others are specialized in local markets, such as Digital China
(China), Redington (India), Express Data (Australia and New Zealand), Intcomex (Latin America), Esprinet (Italy
and Spain) and ALSO-Actebis Holding AG (Europe). We believe that suppliers and resellers pursuing global
strategies continue to seek distributors with global sales and support capabilities.
The evolving direct-sales relationships between manufacturers, resellers, and end-users continue to introduce
change into our competitive landscape. We compete, in some cases, with hardware suppliers and software
publishers that sell directly to reseller customers and end-users. However, we may become a business partner
with these companies by providing supply chain services optimized for the IT market. Additionally, as consol-
idation occurs among certain reseller segments and customers gain market share and build capabilities similar to
ours, certain resellers, such as direct marketers, may become our competitors. As some manufacturer and reseller
customers move their back-room operations to distribution partners, such outsourcing and value-added services
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