Memorex 2007 Annual Report Download - page 35

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See Note 17 to the Consolidated Financial Statements for additional information regarding our business segments
and geographic information.
Description of Business
Products and Application Areas
The table below describes our revenue by product category. Optical products consist of recordable CDs, DVDs and
advanced optical media, primarily Blu-ray. Magnetic products consist of data storage tape media, floppy diskettes and audio
and video tape products. Flash products consist of USB flash drives and flash cards. Electronic products consist of
consumer electronic products sold by the recently acquired Memcorp business. Accessories and other include CD and
DVD labeling products, storage cases and cleaning products as well as products and services not otherwise classified.
Revenue
%of
Total Revenue
%of
Total Revenue
%of
Total
2007 2006 2005
Years Ended December 31,
(Dollars in millions)
Optical . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 954.2 46.3% $ 680.3 42.9% $ 450.7 35.8%
Magnetic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703.9 34.1% 660.8 41.7% 700.5 55.7%
Flash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157.1 7.6% 146.6 9.3% 57.8 4.6%
Electronic products. . . . . . . . . . . . . . . . . . . . . . . 118.1 5.7% — — — —
Accessories & other . . . . . . . . . . . . . . . . . . . . . . 128.7 6.3% 97.0 6.1% 49.1 3.9%
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,062.0 $1,584.7 $1,258.1
Personal storage products, whether for business or consumer applications, are addressed by our broad range of
media across magnetic, optical, solid state USB flash drives and hard disk platforms. Storage capacities on more
established products range from 650 megabyte (MB) CD-R (recordable) and CD-RW (rewritable) optical discs to 9.4
gigabyte (GB) double sided DVD optical discs. Newer products include USB flash drives with capacities ranging from 1GB
up to 8GB. The capacities for USB flash drive and hard disk continue to increase as new products are introduced. Our
blue laser based optical media currently offers 15GB to 50GB of capacity. Capacity for removable hard disk drive
cartridges range from 40GB to 250GB. (One GB equals one thousand MB.)
Our tape products are used for back-up, business and operational continuity planning, disaster recovery, near-line
data storage and retrieval, cost-effective mass storage and archival storage and are used across major application areas,
including enterprise data centers, the network server environment and small-medium businesses. Capacity of our tape
products ranges from less than 10GB up to 800GB per piece of media.
Our consumer electronics portfolio includes LCD displays (flat panel televisions and digital picture frames), karaoke
machines, IPod
TM
accessories, MP3 players, portable CD and DVD players, alarm clocks and clock-radios sold primarily
under the Memorex brand name and certain character-based properties under license. The portfolio continues to evolve
with consumer demand and with development of the Company’s brands.
Customers, Marketing and Distribution
As described above, our data storage media products are used by business customers and by individual consumers
and our electronic products are sold primarily to individual consumers. No one customer constituted 10 percent or more of
our revenue in 2007, 2006 or 2005.
Our products are sold through a combination of distributors, wholesalers, value-added resellers, OEMs and retail
outlets including a growing on-line presence through a variety of channels. Worldwide, approximately 49 percent of our
2007 revenue came from distributors, 44 percent came from the retail channel and 7 percent came from OEMs. We
maintain a company sales force of approximately 250 representatives to generate sales of our products around the world.
We have 33 sales offices worldwide, with three in the United States and 30 internationally.
We work with OEMs that develop or market tape drives, tape libraries, tape automation systems and servers with
storage subsystems for differing customer applications. OEMs include Sun StorageTek, IBM, HP and Tandberg. We are
6