Netgear 2012 Annual Report Download - page 8

Table of Contents
such as fiber optic cabling, which is common in more sophisticated business environments. Security requirements within our products for
commercial business broadband access include firewall, virtual private network and content threat management capabilities that allow for secure
interactions between remote offices and business headquarter locations over the Internet. Our connectivity product offerings for the commercial
business market include enhanced security and remote configurability often required in a business setting. Our ReadyNAS
®
family of network
attached storage products implements redundant array of independent disks data protection, enabling businesses to store and protect critical data
easily, efficiently and intelligently.
Our vision for the home network has always been about having all devices connected to the Internet at all times, thus forming the Smart Homes.
Our focus has been to continue to introduce new products into what we believe are new growth areas which form the basis of Smart Homes: First,
multimedia capable in home WiFi coverage via latest technology (802.11ac) WiFi routers and repeaters; Internet and in home video content
streaming players such Push2TV and NeoTV; home network storage products with easy to use user interfaces, higher capacity and resilience; high
speed DOCSIS 3.0, xDSL and fiber gateways with more integrated functions; and the 4G/Long Term Evolution (“LTE”)
gateways; and home
monitoring and automation devices such as our VueZone home monitoring camera system. We continue to announce and introduce new products in
these significant growth markets.
Our vision for the commercial network is the ultimate move into the effectiveness and efficiency of the hybrid cloud access network. We
believe small and medium enterprises will continue to move into cloud based applications such as Salesforce.com, Ring Central, LifeSize video
conferencing, SuccessFactor, Workday etc. plus moving into utility like on demand computing power supplied by third party data centers. Also more
and more enterprises are enabling the BYOD (bring your own device) environment allowing smart phones, tablets, netbooks to be the business
computing devices of choice. As such we are introducing next generation SMB products in rapid pace: Power over Ethernet (PoE) switches, 10
Gigabit Ethernet switches, high capacity local and remote unified storage, small to medium capacity campus Wireless LAN, and security appliances.
Competition
The consumer, business and service provider markets are intensely competitive and subject to rapid technological change. We expect
competition to continue to intensify. Our principal competitors include:
Other current and potential competitors include numerous local vendors such as Devolo, LEA and AVM in Europe, Corega and Melco in Japan.
Our potential competitors also include other consumer electronics vendors, including LG Electronics, Microsoft, Panasonic, Samsung, Sony, Toshiba
and Vizio, who could integrate networking and streaming capabilities into their line of products, such as televisions, set top boxes and gaming
consoles, and our channel customers who may decide to offer self-
branded networking products. We also face competition from service providers
who may bundle a free networking device with their broadband service offering, which would reduce our sales if we are not the supplier of choice to
those service providers. In the service provider space, we are also facing significant and increased competition from original design manufacturers, or
ODM's, and contract manufacturers who are selling and attempting to sell their products directly to service providers around the world.
Many of our existing and potential competitors have longer operating histories, greater name recognition and substantially greater financial,
technical, sales, marketing and other resources. As a result, they may have more advanced technology, larger distribution channels, stronger brand
names, better customer service and access to more customers than we do. For example, Hewlett-
Packard has significant brand name recognition and
has an advertising presence substantially greater than ours. Similarly, Cisco Systems is well recognized as a leader in providing networking products
to businesses and has substantially greater financial resources than we do. Several of our competitors, such as D-
Link, which offers a range of
products that directly compete with most of our product offerings. Several of our other competitors primarily compete in a more limited manner. For
example, Hewlett-
Packard sells networking products primarily targeted at larger businesses or enterprises. However, the competitive environment in
which we operate changes rapidly. For example, as of the date of this Annual Report, Belkin has entered into an agreement to
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• within the consumer markets, companies such as Apple, Belkin, D-
Link, Dropcam, Foscam, the Linksys division of Cisco Systems (which
was offered to be purchased by Belkin in January 2013), Logitech, Roku, TP Link and Western Digital; and
• within the business markets, companies such as Allied Telesys, Barracuda, Buffalo, Data Robotics, Dell, D-Link, Fortinet, Hewlett-
Packard,
Huawei, Cisco Systems, QNAP Systems, Seagate Technology, SonicWALL, Synology, WatchGuard and Western Digital; and
• within the service provider markets, companies such as Actiontec, Arcadyan, ARRIS, AVM, Comtrend, D-
Link, Hitron, Huawei, Motorola,
Pace, Sagem, Scientific Atlanta-a Cisco company, Sercomm, SMC Networks, TechniColor, Ubee, Compal Broadband, ZTE and ZyXEL.