Seagate 2011 Annual Report Download - page 15

Table of Contents
utilize our 3.5-inch disk drives; our GoFlex® Home products are available in capacities up to 3TB, and our BlackArmor® products are available
in capacities up to 12TB.
Customers
We sell our products to major OEMs, distributors and retailers.
The following table summarizes our 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 12 to 24 months. Deliveries are
scheduled only after receipt of purchase orders. In addition, with limited lead-time, customers may 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 years 2012, 2011 and 2010, Dell Inc. accounted for approximately 15%, 13% and 11% of consolidated revenue, respectively, while
Hewlett-Packard Company accounted for approximately 14%, 15% and 16% of consolidated revenue, respectively. 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
canceled purchases by, one or more of our larger customers."
Competition
The markets that we compete in are intensely competitive. Disk drive manufacturers not only compete for a limited number of major disk
drive customers but also compete with other companies in the electronic data storage industry that provide alternative storage solutions, such as
flash memory and SSDs. Some of the principal factors used by customers to differentiate among electronic data storage solutions manufacturers
are storage capacity, price per unit and price per gigabyte, storage/retrieval access times, data transfer rates, product quality and reliability,
supply continuity, form factor, warranty and brand. We believe that our disk drive products are competitive with respect to each of these factors
in the markets that we currently address.
12
Fiscal Years Ended
June 29,
2012
July 1,
2011
July 2,
2010
Revenues by Channel (%)
OEM
72
%
69
%
71
%
Distributors
21
%
22
%
21
%
Retail
7
%
9
%
8
%
Revenues by Geography (%)
Americas
26
%
29
%
26
%
EMEA
19
%
20
%
22
%
Asia Pacific
55
%
51
%
52
%