Netgear 2012 Annual Report Download - page 10

Table of Contents
our manufacturers purchase all necessary parts and materials to produce complete, finished goods. To maintain quality standards for our suppliers,
we have established our own product quality organization based in Hong Kong and mainland China. They are responsible for auditing and inspecting
process and product quality on the premises of our ODMs, CMs and OEMs.
We obtain several key components from limited or sole sources. For example, many of the semiconductors and meta materials used in our
products are designed for use in our products and are obtained from sole source suppliers on a purchase order basis. In addition, some components
that are used in all our products are obtained from limited sources. These components include connector jacks, plastic casings and physical layer
transceivers. We also obtain switching fabric semiconductors, which are used in our Ethernet switches and Internet gateway products, and wireless
local area network chipsets, which are used in all of our wireless products, from a limited number of suppliers. Our third party manufacturers
generally purchase these components on our behalf on a purchase order basis. If these sources fail to satisfy our supply requirements, our ability to
meet scheduled product deliveries would be harmed and we may lose sales and experience increased component costs.
We currently outsource warehousing and distribution logistics to five main third-
party providers who are responsible for warehousing,
distribution logistics and order fulfillment. In addition, these parties are also responsible for some configuration and re-
packaging of our products
including bundling components to form kits, inserting appropriate documentation, disk drive configuration, and adding power adapters. APL
Logistics Americas, Ltd. in City of Industry, California serves the Americas region, Kerry Logistics Ltd. in Hong Kong serves the Asia Pacific
region, DSV Solutions B.V. and ModusLink B.V. in the Netherlands serve the EMEA, region and Agility Logistics Pty Ltd. in Matraville, NSW,
Australia which serves Australia and New Zealand.
Sales and Marketing
As of December 31, 2012 , we had 352
employees engaged in sales and marketing. We work directly with our customers on market
development activities, such as co-advertising, in-
store promotions and demonstrations, instant rebate programs, event sponsorship and sales
associate training. We also participate in major industry trade shows and marketing events. Our marketing department is comprised of our product
marketing and corporate marketing groups.
Our product marketing group focuses on product strategy, product development roadmaps, the new product introduction process, product
lifecycle management, demand assessment and competitive analysis. The group works closely with our sales and research and development groups to
align our product development roadmap to meet customer technology demands from a strategic perspective. The group also ensures that product
development activities, product launches, channel marketing program activities, and ongoing demand and supply planning occur in a well-
managed,
timely basis in coordination with our development, manufacturing, and sales groups, as well as our ODM, OEM and sales channel partners.
Our corporate marketing group is responsible for defining and building our corporate brand. The group focuses on defining our mission, brand
promise and marketing messages on a worldwide basis. This group also defines the marketing approaches in the areas of advertising, public relations,
events, channel programs and our web delivery mechanisms. These marketing messages and approaches are customized for the commercial business,
home user, and broadband service provider markets through a variety of delivery mechanisms designed to effectively reach end-users in a cost-
efficient manner.
We conduct most of our international sales and marketing operations through wholly-
owned subsidiaries which operate via sales and marketing
subsidiaries and branch offices worldwide.
Customer Support
We design our products with “plug-and-play”
ease of use. We respond globally to customer questions through a variety of venues including
phone, chat and email. Customers can also get self-
help service through the comprehensive knowledgebase and the user forum on our website.
Customer support is provided through a combination of a limited number of permanent employees and use of subcontracted, out-
sourced resources.
Our permanent employees design our technical support database and are responsible for training and managing our outsourced sub-
contractors. They
also handle escalations from the outsourced resources. We utilize the information gained from customers by our customer support organization to
enhance our product offerings, including further simplifying the installation process.
Intellectual Property
We believe that our continued success will depend primarily on the technical expertise, speed of technology implementation, creative skills and
management abilities of our officers and key employees, plus ownership of a limited but important set of copyrights, trademarks, trade secrets and
patents. We primarily rely on a combination of copyright, trademark and trade secret and patent laws, nondisclosure agreements with employees,
consultants and suppliers and other contractual provisions to establish,
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