Memorex 2009 Annual Report Download - page 9

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PART I
Item 1. Business.
General
Imation Corp., a Delaware corporation, is a leading global developer and marketer of branded products that enable
people to capture, save and enjoy digital information. Our portfolio of recordable optical media, magnetic tape media, flash
products and consumer electronic products and accessories reaches customers in approximately 100 countries through our
global distribution network. Our goal is to be a company with strong commercial and consumer businesses and continued
long-term growth and profitability that creates shareholder value. As used herein, the terms “Imation,” “Company,” “ we,”
“us,” or “our” mean Imation Corp. and its subsidiaries unless the context indicates otherwise.
We have a long history in the data storage media industry, beginning with development of the first commercialized
data storage tape in 1952 when we were part of 3M Company. In July 1996, Imation was established as a spin-off of the
businesses which comprised substantially all of the data storage and imaging systems groups of 3M Company. We
subsequently divested all of the non-data storage businesses acquired from 3M Company in connection with the spin-off.
These divestitures allowed us to focus on data storage media, primarily as a manufacturer of magnetic tape products
under the Imation brand, sold to commercial end users through multiple distribution channels. We then expanded our
business into other removable data storage media such as optical media, flash and solid state drives, and removable and
external hard disk drives. In 2006, we acquired substantially all of the assets of Memorex International Inc. (Memorex),
followed by the acquisition of the TDK Recording Media business (TDK) in 2007. In 2007, we also acquired certain assets
of Memcorp, Inc., and Memcorp Asia Limited, (together Memcorp) used in or relating to the sourcing and sale of consumer
electronic products, principally under the Memorex brand name. This acquisition established our foundation in audio and
video consumer electronic products. In 2008, we expanded our presence in consumer electronic products with the Xtreme
Accessories, LLC (XtremeMac) acquisition, a maker of accessories for Apple consumer electronic products.
Our global brand portfolio includes the Imation brand, the Memorex brand, one of the most widely recognized names
in the consumer electronics industry and famous for the slogan, “Is it live or is it Memorex?” and the XtremeMac brand.
Imation is also the exclusive licensee of the TDK Life on Record brand, one of the world’s leading recording media brands.
Our Products
Data Storage Products
Our recordable optical media products consist of CDs, DVDs and Blu-ray recordable media. We have the leading
global market share for recordable optical media. While the overall market for CDs and DVDs is declining as streaming
digital, hard disk and flash media replace optical media in some applications such as music and video recording, we have
increased our market share through our acquisitions and by execution of our optical brand consolidation strategy. We sell
high capacity Blu-ray discs which are used primarily for recording high-definition video content. Our recordable optical
media products are sold through a variety of retail and commercial distribution channels and sourced from manufacturers
primarily in Taiwan and India. Optical storage capacities range from 650 megabyte CD-R (recordable) and CD-RW
(rewritable) optical discs to 9.4 gigabyte (GB) double-sided DVD optical discs and Blu-ray discs with 25GB to 50GB of
capacity. Our optical media is sold throughout the world under brands we own or control, including Imation, Memorex and
TDK Life on Record, and under a distribution agreement for the Hewlett Packard brand.
Our magnetic tape products consist of data storage tape media, audio and video tape products and floppy diskettes.
Data storage tape media is used for back-up, business and operational continuity planning, disaster recovery, near-line
data storage and retrieval and for cost-effective mass and archival storage. Major application areas for magnetic tape
products include enterprise data centers, network servers, and for the data storage needs of small to medium sized
businesses. Native capacity of our tape products range from less than 10GB up to 1.6 terabytes (TB) per cartridge. We
enjoy a leading market share, a significant intellectual property portfolio, a solid industry reputation, and strong relationships
with key original equipment manufacturers (OEMs). Many of our legacy tape formats are proprietary or semi-proprietary
and have higher gross profit margins than our other products. Our magnetic tape products are sold throughout the world
under various brands. We also have agreements under which we distribute certain products under other brands, including
IBM and Sun StorageTek. We have recently introduced “data protection” products, such as the DataGuard rf
TM
Tape
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