Netgear 2011 Annual Report Download - page 6

Table of Contents
Markets
Our goal is to be the leading provider of innovative networking products to the consumer, business, and service provider markets. A
number of factors are driving today’s demand for networking products within these markets. As the number of computing devices, such as PCs,
smart phones and tablet computers, has increased in recent years, networks—especially WiFi networks—are being deployed more broadly in
order to share information and resources among users and devices. This information and resource sharing occurs internally, through a local area
network, or externally, via the Internet. To take advantage of complex applications, advanced communication capabilities and rich multimedia
content, users are upgrading their Internet connections by deploying high-speed broadband access technologies. Users also seek the convenience
and flexibility of operating their PCs, laptops, smart phones, tablet computers and related computing devices while accessing their content in a
more mobile, or wireless, manner. In addition, market demand for television connectivity products has increased significantly as well, where
users seek to connect their televisions to the Internet and for entertainment content. Finally, as the usage of networks, including the Internet, has
increased, users have become much more focused on the security of their connections and the protection of the data within their networks.
Consumers, businesses and service providers demand a complete set of wired and wireless networking and broadband products that are
tailored to their specific needs and budgets and also incorporate the latest networking technologies. These users require the continual
introduction of new and refined products and often lack extensive IT resources and technical knowledge. Therefore, they demand ‘plug-and-
play’ or easy-to-install and use products that require little or no maintenance, and customer service and support. We believe that these users also
prefer the convenience of obtaining a networking solution from a single company with whom they are familiar; as these users expand their
networks, they tend to be loyal purchasers of that brand. In addition, purchasing decisions of users in these markets are also driven by the
affordability of networking products. To provide reliable, easy-to-use products at an attractive price, we believe a successful supplier must have
a company-wide focus on the unique requirements of these markets, operational discipline and cost-efficient infrastructure and processes that
allow for efficient product development, manufacturing and distribution.
Sales Channels
We sell our products through multiple sales channels worldwide, including traditional retailers, online retailers, wholesale distributors,
direct market resellers (“DMRs”), value-added resellers (“VARs”), and broadband service providers.
Wholesale Distribution. Our distribution channel supplies our products to retailers, e-commerce resellers, Direct Market Resellers and
Value Added Resellers. We sell directly to our distributors, the largest of which are Ingram Micro, Inc. and Tech Data Corporation.
Retailers. Our retail channel primarily supplies products that are sold into the consumer market. We sell directly to, or enter into
consignment arrangements with, a number of our traditional retailers. The remaining traditional retailers, as well as our online retailers, are
fulfilled through wholesale distributors. We work directly with our retail channels on market development activities, such as co-advertising, in-
store promotions and demonstrations, instant rebate programs, event sponsorship and sales associate training, as well as establishing “store
within a store” websites and banner advertising.
DMRs and VARs. We primarily sell into the commercial business marketplace through an extensive network of DMRs and VARs. Our
DMRs include companies such as CDW and Insight. VARs include our network of registered Powershift Partners, and resellers that are not
registered in our Powershift partner program. DMRs and VARs may receive sales incentives, marketing support and other program benefits from
us. Our DMRs and VARs generally purchase our products through our wholesale distributors.
Broadband Service Providers. We also supply our products directly to broadband service providers in the United States and
internationally. Service providers supply our products to their business and home subscribers.
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