SanDisk 2007 Annual Report Download - page 52

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We have a separate distribution network focused on the mobile phone market. Our distributors provide us
access to mobile network operator branded storefronts as well as other retailers with significant mobile
communications offerings.
We support our retail sales channels with both direct sales representatives and independent manufacturers’
representatives. We have organized our sales activities into four regional territories: Americas, Europe,
Middle East and Africa, or EMEA, Asia Pacific, or APAC, and Japan.
•OEM. Our OEM customers include manufacturers of mobile phones, digital cameras, PCs, GPS and other
digital consumer devices, such as personal computers and gaming devices. Our products are sold directly to
OEMs and through distributors. We support our OEM customers through our direct sales representatives as
well as through independent manufacturers’ representatives.
As of the end of fiscal years 2007 and 2006, our backlog was $224 million and $177 million, respectively. Due
to industry practice that allows customers to change or cancel orders with limited advance notice prior to shipment,
we do not believe that backlog, as of any particular date, is indicative of future sales.
Our revenues are seasonally higher in our fourth quarter due to the holiday buying season. Our first and third
quarters have sometimes been seasonally lower than the preceding quarters.
Our Customers. In fiscal years 2007, 2006 and 2005, revenues from our top 10 customers and licensees
accounted for approximately 46%, 52% and 50% of our total revenues, respectively. In fiscal years 2007 and 2006,
no single customer or licensee accounted for greater than 10% of our total revenues. In fiscal year 2005, Best Buy
accounted for 11% of our total revenues. The composition of our major customer base has changed over time, and
we expect this pattern to continue as our markets and strategies evolve. Sales to our customers are generally made
pursuant to purchase orders rather than long-term contracts.
Our Products. Our products are sold under the SanDisk brand in a wide variety of form factors and include
the following:
•Removable Cards. Our removable data storage solutions are available in almost every major form factor in
our primary markets. For example, our CompactFlash removable cards, available in capacities up to 16
gigabytes, are well-suited for a range of consumer applications, including digital cameras. Our professional
products include the SanDisk Ultra»and SanDisk Extreme»product lines which are designed with
additional performance and reliability. Our ultra-small microSD removable cards, available in capacities
up to 8 gigabytes, are designed for use in mobile phones.
•USB Drives. Our Cruzer»line of USB drives, available in capacities up to 8 gigabytes, are highly-reliable
and high-performance devices. USB Flash Drives, or UFDs, are used in the computing and consumer
markets. A number of our Cruzers ship with U3
TM
Smart Technology, which gives the user the ability to carry
files and application software on a secure USB drive. Also, our Cruzer Crossfire UFDs are specially
designed to make the console or PC gaming experience portable. Our Professional and Enterprise line of
UFDs are geared towards the corporate user and are specifically designed to support secure and authorized
access to corporate information.
•Embedded. Our embedded products are a set of reliable, high-capacity, high performance and cost-
effective embedded flash memory drive solutions for both data and code storage. Our iNAND
TM
embedded
flash product line, with capacities up to 16 gigabytes, are designed to respond to the increasing demand for
embedded storage for mobile phones and other portable devices. We also offer high-capacity solid-state
drives targeted for the personal computing and network server markets in capacities up to 72 gigabytes.
•Digital Media Players. Sansa is our branded line of flash-based digital media players for the digital audio
and video player market. Many of our Sansa models offer a removable card slot for easy transportability of
music between devices and storage capacity expansion. Features within our Sansa line of products include
FM radio, voice recording and support for a variety of audio and video music download and subscription
services. Sansa media players are available in capacities up to 32 gigabytes.
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