TiVo 2005 Annual Report Download - page 12

Download and view the complete annual report

Please find page 12 of the 2005 TiVo 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 117

  • 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

Table of Contents
Research and Product Development
Our research and development efforts are focused on designing and developing the components necessary to enable the TiVo service. These activities
include both hardware and software development.
Fiscal Year Ended
January 31,
TiVo Inc. 2006 2005 2004
(in millions)
Research and Development Expenses $ 41.1 $ 37.6 $ 22.2
Although our total company employee headcount increased by approximately 25% in fiscal year 2006, we increased the number of our regular,
temporary, and part-time employees engaged in research and development by 16% from a total of 228 to 264 as of January 31, 2006 compared to January 31,
2005.
Competition
We believe that the principal competitive factors in the DVR market are brand recognition and awareness, functionality, ease of use, availability, and
pricing. We currently see two primary categories of DVR competitors: DVRs offered by cable and satellite operators and DVRs offered by consumer
electronics and software companies.
Satellite and Cable DVR Competitors. We compete against cable and satellite set-top boxes that integrate DVR functionality.
• Satellite: EchoStar offers a range of DVR models, including standard definition and high definition models, most of which offer dual tuner
capabilities. Certain models can output signals to multiple TVs within the household. Certain models offer name-based recordings instead of
timeslot-base recordings. DIRECTV has introduced a DVR technology from NDS. The current DIRECTV DVR from NDS does not support
recording of high-definition broadcasts.
• Cable: Cable operators have made DVR technology available on set-top boxes from Scientific-Atlanta and Motorola. These products combine
digital and analog cable reception with DVR functionality; some versions offer dual tuner and/or high definition capabilities Other competition in
the cable DVR market comes from other software providers including TV Guide, Microsoft, Aptiv, Digital, and Digeo.
U.S. cable operators are currently deploying server-based Video on Demand (VOD) technology from SeaChange, Concurrent, and others, which could
potentially evolve into competition. Additionally, we are aware of at least one U.S. cable operator, Cablevision, Inc., which has announced plans to test
server-based DVR technology. Server-based VOD and DVR technology rely on content servers located within the cable operator's central head-end that
stream video across the network to a digital cable set-top box within the consumer's home. Cable operators can use server-based VOD and DVR technology to
deliver movies, television shows, and other content to consumers. Consumers can watch this programming on demand, with VCR-like pausing and rewinding
capabilities. Operators can charge consumers for access to VOD content on a per-transaction or monthly subscription basis, or can offer content without
charge. To the extent that cable operators offer regular television programming as part of their server-based VOD offerings and DVR technology, consumers
have an alternate means of watching time-shifted shows besides DVRs.
Consumer Electronics Competitors. We compete against several types of products with basic time-slot based recordings or enhanced electronic
program guide (EPG) based DVR functionality offered by consumer electronics companies. These products record an analog television signal output from a
cable or satellite set-top box, analog cable feed, or antenna.
8