Seagate 2015 Annual Report Download - page 15

TableofContents
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includingsalesprogramsofferedtopromoteselectedproducts.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2016,2015and2014,DellInc.accountedforapproximately12%,14%and13%ofconsolidatedrevenue,respectively.Infiscalyear2015and
2014,Hewlett-PackardCompanyaccountedforapproximately12%and13%ofconsolidatedrevenue,respectively.Infiscalyear2016,HPInc.,formerlyknownas
Hewlett-PackardCompany,completeditsseparationwithHewlettPackardEnterpriseCompany,andeachcompanyaccountedforlessthan10%ofour
consolidatedrevenue.See"Item1A.RiskFactors-RisksRelatedtoOurBusiness-Wemaybeadverselyaffectedbythelossof,orreduced,delayedorcanceled
purchasesby,oneormoreofourlargercustomers."
Competition
Wecompeteprimarilywithmanufacturersofharddrivesusedintheenterprise,clientcomputeandclientnon-computeapplications.Wearealsoasupplierof
EnterpriseSSDs,PCIeacceleratorcards,cloudstoragesolutions,HDDtestequipment,andstoragesubsystemsthroughouracquisitions.Themarketsthatwe
participateinarehighlycompetitive.Diskdrivemanufacturerscompeteforalimitednumberofmajordiskdrivecustomersbutalsocompetewithothercompanies
intheelectronicdatastorageindustrythatprovideSSDsandPCIetechnology.Someoftheprincipalfactorsusedbycustomerstodifferentiateamongelectronic
datastoragesolutionsmanufacturersarestoragecapacity,productperformance,productqualityandreliability,priceperunitandpricepergigabyte,time-to-market
andtime-to-volumeleadership,storage/retrievalaccesstimes,datatransferrates,formfactor,productwarrantyandsupportcapabilities,supplycontinuityand
flexibility,powerconsumption,totalcostofownership,andbrand.Whiledifferent
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 FiscalYearsEnded 
 
July1,
2016 
July3,
2015 
June27,
2014 
RevenuesbyChannel(%)       
OEM   70% 71% 68%
Distributors   16% 17% 20%
Retail   14% 12% 12%
RevenuesbyGeography(%)(1)       
Americas   29% 28% 27%
EMEA   17% 17% 19%
AsiaPacific   54% 55% 54%
(1) Revenueisattributedtocountriesbasedontheshippinglocation.