SanDisk 2009 Annual Report Download - page 62

all major brands of digital cameras. Our cards are also used to store video in solid-state digital
camcorders and to store digital data in many other devices, such as maps in GPS devices. In addition,
portable game devices now include advanced features that require high capacity memory storage cards
and we provide SD cards and Memory Stick PRO Duo™ cards that are all specifically packaged for the
gaming market. We also sell a line of digital media players with both embedded and removable
memory under our Sansa brand with varying combinations of audio and video capabilities. We also sell
slotMusic cards and slotRadio which are preloaded with music content and can be used in a wide
variety of mobile phones and digital media players. Primary card formats for consumer devices include
CF, SD, Memory Stick and xD-Picture Card™.
•Computing. We provide multiple flash storage devices and solutions for the computing market. USB
flash drives allow consumers to store computer files, pictures and music on keychain-sized devices and
then quickly and easily transfer these files between laptops, notebooks, desktops and other devices that
incorporate a USB connection. USB flash drives are easy to use, have replaced floppy disks and other
types of external storage media, and are evolving into intelligent storage devices. In addition, we sell
modular SSDs, which we call pSSD™, that are flash-based embedded storage devices with capacities
of up to 64 gigabytes for the netbook computer market. We are currently developing SSDs for the
mainstream notebook and desktop computer markets and we believe that SSDs will become a major
application for NAND flash memory over the next several years as they are increasingly likely to
replace hard disk drives in a variety of computing solutions.
Our Sales Channels
Our products are delivered to end-users through worldwide retail storefronts and also by bundling data
storage cards with host products or by embedding our data storage products in host devices sold by our OEM
customers.
Our sales are made through the following channels:
•Retail. We sell SanDisk branded products directly or through distributors to consumer electronics
stores, office superstores, photo retailers, mobile phone stores, mass merchants, catalog and mail order
companies, internet and e-commerce retailers, drug stores, supermarkets and convenience stores.
We support our retail sales channels with both direct sales representatives and independent
manufacturers’ representatives. Our sales activities are organized into four regional territories:
Americas; Europe, Middle East and Africa, or EMEA; Asia Pacific, or APAC; and Japan.
•OEM. We sell our products through OEM customers who bundle or embed our products in a large
variety of digital consumer devices, including mobile phones, digital cameras, personal computers, or
PCs, navigation devices and gaming products. We also sell products to OEM customers that offer the
products under their own brand name in retail channels. We sell 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 2009 and 2008, our backlog was $268 million and $169 million, respectively.
Because our customers can change or cancel orders with limited or no penalty and limited advance notice prior to
shipment, we do not believe that backlog, as of any particular date, is indicative of future sales.
Because our products are primarily destined for consumers, our revenue is generally highest in our fourth
quarter due to the holiday buying season. In addition, our revenue is generally lowest in the first quarter of the
fiscal year.
In fiscal years 2009, 2008 and 2007, revenues from our top 10 customers and licensees accounted for
approximately 42%, 48% and 46% of our total revenues, respectively. All customers were individually less than
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