Seagate 2014 Annual Report Download - page 22

Download and view the complete annual report

Please find page 22 of the 2014 Seagate annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 148

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148

TableofContents
comparedtonewproducts.Asaresult,evenifweareamongthefirst-to-maturitywithagivenproduct,subsequentintroductionsorannouncementsbyour
competitorsofnewproductscouldcauseustoloserevenueandnotachieveapositivereturnonourinvestmentinexistingproductsandinventory.
Ifwecannotsuccessfullydelivercompetitiveproducts,ourfutureresultsofoperationsmaybeadverselyaffected.
Ourindustriesarehighlycompetitiveandourfailuretoanticipateandrespondtotechnologicalandmarketdevelopmentscouldharmourabilitytocompete.
Weoperateinmarketsthatarehighlycompetitiveandsubjecttorapidchangeandthataresignificantlyaffectedbynewproductintroductions,substantial
priceerosionandlowerpricesaspartofastrategytogainorretainmarketshareandcustomers.Shouldthesepracticescontinue,wemayneedtocontinually
reduceourpricesforexistingproductstoretainourmarketshare,whichcouldadverselyaffectourresultsofoperations.
Ourabilitytooffsettheeffectofpriceerosionthroughnewproductintroductionsathigheraveragepricesisdiminishedtotheextentcompetitorsintroduce
productsintoparticularmarketsaheadofoursimilar,competingproducts.Ourabilitytooffsettheeffectofpriceerosionisalsodiminishedduringtimeswhen
supplyexceedsdemandforaparticularproduct.
Marketshareforourproductscanbenegativelyaffectedbyourcustomers'diversifyingtheirsourcesofsupplyasourcompetitorsenterthemarketfor
particularproducts,aswellasbyourabilitytorampvolumeproductionofnewproductofferings.Whenourcompetitorssuccessfullyintroduceproductofferings
thatarecompetitivewithourrecentlyintroducedproducts,ourcustomersmayquicklydiversifytheirsourcesofsupply.Anysignificantdeclineinourmarketshare
inanyofourprincipalmarketapplicationswouldadverselyaffectourresultsofoperations.
Ourprincipalsourcesofcompetitioninclude:
•diskdrivemanufacturers,suchasWesternDigitalCorporationandToshiba;
•companiesprovidingstoragesubsystemsandcomponentstoOEMs;
•electronicmanufacturingservices("EMS")companiesacquiringthenecessaryskillsandintellectualpropertytoentertheenterprisedatastorage
marketplace;
•otherhighperformancecomputing("HPC")datastorageproviders;
•collaborationsbetweenin-housedevelopmentteamsofexistingandpotentialcustomersandacombinationofEMS,contractelectronic
manufacturing("CEM")oremergingtechnologycompanies.
Wealsoexperiencecompetitionfromothercompaniesthatproducealternativestoragetechnologieslikeflashmemory,whereincreasingcapacity,decreasing
cost,energyefficiencyandimprovementsinperformanceruggednesshaveresultedincompetitionwithourlowercapacity,smallerformfactordiskdrives.While
thiscompetitionhastraditionallybeeninthemarketsforhandheldconsumerelectronicsapplications,thesecompetitorshaveannouncedsolidstatedrives(SSDs)
fortablet,notebookandenterprisecomputeapplications.CertaincustomersforbothnotebookandenterprisecomputeapplicationsareadoptingSSDsas
alternativestoharddrivesincertainapplications.Furtheradoptionofthesealternativestoragetechnologiesmayimpactthecompetitivenessofourproduct
portfolioandreduceourmarketshareandadverselyaffectourresultsofoperation.
Themarketsforourdatastoragesystemproductsarealsocharacterizedbytechnologicalchangedriveninpartbytheadoptionofnewindustrystandards.
Thesestandardsprovidemechanismstoensuretechnologycomponentinteroperabilitycanoccurandmayreduceourcapabilityfordifferentiationorinnovation
andouraffectedproductswouldreverttocommoditystatus.Thiscouldlowerthebarriersto
19