Seagate 2010 Annual Report Download - page 14

Table of Contents
We ship external backup storage solutions under our Free Agent Go™ and Free Agent Go Flex™ product lines. Both of these product lines
utilize our 3.5-inch and 2.5-inch disk drives, which are available in capacities up to 3TB and 1TB, respectively.
Customers
We sell our disk drives to major OEMs, distributors and retailers under our globally recognized brand names. We have longstanding
relationships with many of our OEM customers, such as Hewlett-Packard Company, Dell Inc. and EMC Corporation.
The following table summarizes our disk drive revenue by channel and by geography:
OEM customers typically enter into master purchase agreements with us. These agreements provide for pricing, volume discounts, order
lead times, product support obligations and other terms and conditions. The term of these agreements is usually 6 to 24 months; however they are
generally cancelable for convenience by either party upon written notice. Our product support obligations generally extend substantially beyond
the term of these agreements. These master agreements typically do not commit the customer to buy any minimum quantity of products or create
exclusive relationships. Deliveries are scheduled only after receipt of purchase orders. In addition, with limited lead-time, customers may cancel
or defer most purchase orders without significant penalty. Anticipated orders from many of our customers have in the past failed to materialize
or OEM delivery schedules have been deferred or altered as a result of changes in their business needs.
Our distributors generally enter into non-exclusive agreements for the resale of our products. They typically furnish us with a non-binding
indication of their near-term requirements and product deliveries are generally scheduled accordingly. The agreements and related sales
programs typically provide the distributors with limited right of return and price protection rights. In addition, we offer sales programs to
distributors on a quarterly and periodic basis to promote the sale of selected products in the sales channel.
Our retail channel consists of our branded storage products sold to retailers either by us directly or by our distributors. Retail sales made by
us or our distributors typically require greater marketing support, sales incentives and price protection periods.
In fiscal year 2011, Hewlett-Packard Company accounted for approximately 15% of consolidated revenue, while Dell Inc. accounted for
approximately 13% of consolidated revenue. In each of fiscal years 2010 and 2009, Hewlett-Packard Company accounted for approximately
16% of consolidated revenue, while Dell Inc. accounted for approximately 11% of consolidated revenue. We have master purchase agreements
in place with Hewlett-
Packard Company and Dell Inc. that are cancelable for convenience by either party upon written notice, and do not require
either customer to purchase any minimum or other specified quantity of our products. See "Item 1A. Risk Factors—Risks Related to Our
Business—Dependence on Key Customers—We may be adversely affected by the loss of, or reduced, delayed or cancelled purchases by, one or
more of our larger customers."
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Fiscal Years Ended
July 1,
2011
July 2,
2010
July 3,
2009
Revenues by Channel (%)
OEM
69
%
71
%
64
%
Distributors
22
%
21
%
27
%
Retail
9
%
8
%
9
%
Revenues by Geography (%)
Americas
29
%
26
%
28
%
EMEA
20
%
22
%
27
%
Asia Pacific
51
%
52
%
45
%