SanDisk 2013 Annual Report Download - page 148

Results of Operations
Revenue by Channel.
FY 2013 FY 2012 FY 2011
Percent Percent Percent
Revenue of Total Revenue of Total Revenue of Total
(In millions, except percentages)
Commercial ................ $ 3,907.3 63.3% $ 3,205.5 63.4% $ 3,833.0 67.7%
Retail .................... 2,262.7 36.7% 1,847.0 36.6% 1,829.1 32.3%
Total revenue ........... $ 6,170.0 100.0% $ 5,052.5 100.0% $ 5,662.1 100.0%
The increase in our fiscal year 2013 revenue, compared to fiscal year 2012, reflected a 22% increase in
the number of gigabytes sold with no change in the average selling price per gigabyte. The increase in
Commercial revenue is primarily related to increased sales of client and enterprise SSD products and
embedded memory products for mobile devices, partially offset by decreased sales of cards for mobile
devices due to continued OEM debundling and our allocation of less supply to private label channels. The
increase in Retail revenue is primarily related to increased sales of cards for mobile devices, USB drives
and SSDs. While sales of cards for mobile devices through the Commercial channel are down on a
year-over-year basis, increased sales in aftermarket retail mobile cards have partially offset the
Commercial channel declines.
The decrease in our fiscal year 2012 revenue, compared to fiscal year 2011, reflected a 45% reduction
in average selling price per gigabyte, partially offset by a 62% increase in the number of gigabytes sold. A
primary factor in the decrease in revenue was a steep rate of price decline in the year ended December 30,
2012 largely due to oversupply in the NAND industry in the first half of fiscal year 2012. The increase in
number of gigabytes sold was driven by an 11% increase in memory units sold with an increase in average
capacity of 47%. The decrease in revenue in fiscal year 2012, over fiscal year 2011, was due primarily to
lower Commercial sales of cards and embedded products for mobile devices, and lower sales of wafers and
components, partially offset by increased sales of client and enterprise SSD products. Our sales of mobile
cards were lower due to a reduced rate of card bundling and bundling of lower capacity cards by mobile
commercial customers, and in the first half of fiscal year 2012, our sales of mobile embedded products were
lower as our next generation of those products were in various stages of development and qualification.
Our Retail revenue for fiscal year 2012, compared to fiscal year 2011, remained relatively flat compared to
the prior year.
Geographical Revenue.
FY 2013 FY 2012 FY 2011
Percent Percent Percent
Revenue of Total Revenue of Total Revenue of Total
(In millions, except percentages)
United States ............... $ 877.8 14.2% $ 714.3 14.2% $ 853.8 15.1%
Asia-Pacific ................ 4,209.8 68.3% 3,467.7 68.6% 3,896.5 68.8%
Europe, Middle East and Africa . . 780.1 12.6% 642.5 12.7% 688.5 12.2%
Other foreign countries ........ 302.3 4.9% 228.0 4.5% 223.3 3.9%
Total revenue ........... $ 6,170.0 100.0% $ 5,052.5 100.0% $ 5,662.1 100.0%
Revenue in the U.S. increased in fiscal year 2013, compared to fiscal year 2012, due primarily to
increased sales of client and enterprise SSD products, retail cards for mobile devices and USB drives.
Revenue in Asia-Pacific increased in fiscal year 2013, compared to fiscal year 2012, due primarily to
increased sales of client and enterprise SSD products and embedded products for mobile devices, partially
50