SanDisk 2010 Annual Report Download - page 171

This is a TAB type table. Insert
conts here. Annual Report
Geographical Product Revenues.
FY 2010 FY 2009 FY 2008
Revenue
Percent
of Total Revenue
Percent
of Total Revenue
Percent
of Total
(In millions, except percentages)
United States ...................... $ 771.0 17% $ 916.3 29% $ 1,006.7 35%
Asia-Pacific ....................... 2,825.1 63% 1,447.7 46% 1,013.1 36%
Europe, Middle East and Africa ....... 714.3 16% 707.7 22% 752.6 26%
Other foreign countries .............. 152.5 4% 82.6 3% 70.8 3%
Product revenues ............... $4,462.9 100% $ 3,154.3 100% $ 2,843.2 100%
Product revenues in Asia-Pacific, which includes Japan, increased in fiscal year 2010 on a year-over-year
basis due primarily to increased OEM sales of mobile phone products, wafers and components, and growth in
retail sales primarily of imaging products. The decrease in product revenues for the U.S. in fiscal year 2010
compared to fiscal year 2009 primarily reflected a shift in our OEM sales from U.S. customers to Asia-Pacific
customers. Product revenues in EMEA increased slightly compared to fiscal year 2009, reflecting increased
OEM sales primarily for the mobile market, partially offset by a decrease in retail sales due to continued weak
consumer spending and our decision not to participate in certain lower-margin opportunities.
Product revenues in Asia-Pacific increased in fiscal year 2009 on a year-over-year basis due to growth in
our OEM channel sales for the mobile phone market and growth in the sale of private label cards, wafers and
components. Product revenues in fiscal year 2009 compared to fiscal year 2008 decreased in the U.S. and EMEA,
primarily due to a weak consumer spending environment.
License and Royalty Revenues.
FY 2010
Percent
Change FY 2009
Percent
Change FY 2008
(In millions, except percentages)
License and royalty revenues ................... $ 363.9 (12)% $ 412.5 (19)% $ 508.1
The decrease in our fiscal year 2010 license and royalty revenues when compared to fiscal year 2009 was
primarily due to a lower effective royalty rate in a renewed license agreement with one of our significant
licensees as compared to the previous license agreement.
The decrease in our fiscal year 2009 license and royalty revenues when compared to fiscal year 2008 was
due to lower flash memory revenues reported by our licensees and a new license agreement with an existing
licensee at a lower effective royalty rate as compared to the previous license agreement. These declines were
partially offset by fiscal year 2009 including a full year of royalty revenue for new licensees added in fiscal year
2008.
Gross Margins.
FY 2010
Percent
Change FY 2009
Percent
Change FY 2008
(In millions, except percentages)
Product gross profit (loss) ..................... $1,898.2 118% $ 872.1 296% $ (445.0)
Product gross margins (as a percent of product
revenue) ................................. 42.5% 27.6% (15.7)%
Total gross margins (as a percent of total
revenue) ............................. 46.9% 36.0% 1.9%
Product gross margins in fiscal year 2010 increased compared to fiscal year 2009 due primarily to cost
reductions exceeding average selling price reductions. The decrease in product cost is primarily due to wafer
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