Shutterfly 2009 Annual Report Download - page 27

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Please find page 27 of the 2009 Shutterfly 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.

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We face intense competition from a range of competitors and may be unsuccessful in competing against current and future competitors.
The digital photography products and services industries are intensely competitive, and we expect competition to increase in the future as
current competitors improve their offerings and as new participants enter the market or as industry consolidation further develops. Competition
may result in pricing pressures, reduced profit margins or loss of market share, any of which could substantially harm our business and results of
operations. We face intense competition from a wide range of companies, including the following:
Many of our competitors have significantly longer operating histories, larger and broader customer bases, greater brand and name
recognition and greater financial, research and development and distribution resources, and operate in more geographic areas than we do. Well-
funded competitors may be better able to withstand economic downturns and associated periods of reduced customer spending and increased
pricing pressures. The numerous choices for digital photography services can cause confusion for consumers, and may cause them to select a
competitor with greater name recognition. Some competitors are able to devote substantially more resources to website and systems development
or to investments or partnerships with traditional and online competitors. Competitors that are well-
funded, particularly new entrants may choose
to prioritize growing their market share and brand awareness instead of profitability. Competitors and new entrants in the digital photography
products and services industries may develop new products, technologies or capabilities that could render obsolete or less competitive many of
the products, services and content that we offer. We may be unable to compete successfully against current and future competitors, and
competitive pressures could harm our business and prospects.
•
Online digital photography services companies such as Kodak EasyShare Gallery (formerly known as Ofoto), Snapfish, which is a service
of Hewlett
-
Packard, American Greetings
’
Photoworks and Webshots brands, and others;
•
“Big Box” retailers such as Wal-Mart, Costco and others that are seeking to offer low cost digital photography products and services, such
as in-store fulfillment and self-service kiosks for printing; these competitors may, among other strategies, offer their customers heavily
discounted in
-
store products and services that compete directly with our offerings;
•
Drug stores such as Walgreens, CVS and others that offer in
-
store pick
-
up from Internet orders;
•
Regional photography companies such as Ritz Camera that have established brands and customer bases in existing photography markets;
•
Internet portals and search engines such as Yahoo!, AOL, Google that offer broad
-
reaching digital photography and related products and
services to their large user bases;
•
Home printing service providers such as Hewlett
-
Packard, Epson, Canon, and Kodak that are seeking to expand their printer and ink
businesses by gaining market share in the emerging digital photography marketplace; and
•
Photo
-
related software companies such as Apple, Microsoft and Corel;
•
Social media companies that host images such as MySpace, Facebook and Hi5; and
•
Specialized companies in the photo book and stationery business such as Hallmark, American Greetings, Tiny Prints, Picaboo and Blurb.
25