TiVo 2007 Annual Report Download - page 19

Table of Contents
In addition, we face the following risks in relying on these third parties:
If our manufacturing relationships are not successful, we may be unable to satisfy demand for our products and services. We manufacture DVRs that
enable the TiVo service through a third-party contract manufacturer. Delays, product shortages, and other problems could impair our retail distribution and
brand image and make it difficult for us to attract subscriptions. In addition, the loss of a manufacturer would require us to identify and contract with
alternative sources of manufacturing, which we may be unable to do or which could prove time-consuming and expensive.
We are dependent on sole suppliers for several key components and services. If these suppliers fail to perform their obligations, we may be unable to
find alternative suppliers or deliver our products and services to our customers on time. We currently rely on sole suppliers for a number of the key
components used in the TiVo-enabled DVRs and the TiVo service. For example, Broadcom is the sole supplier of the system controller for our DVR.
We do not currently have a long-term written supply agreement with Broadcom. Therefore, Broadcom may not be contractually obligated to supply us
with these key components on a long-term basis or at all. In addition to the above, we have several sole suppliers for key components of our products
currently under development, although it is currently anticipated that those will be provided under signed supply agreements.
Tribune is the sole supplier of the program guide data for the TiVo service. Tribune Media Services, Inc., or Tribune, is the current sole supplier of
program guide data for the TiVo service. Our current Television Listings Data Agreement with Tribune became effective on May 14, 2007 and has an initial
term of five years and with TiVo having the right to renew the agreement for four additional years. The agreement provides each party with a termination
right if the other party becomes controlled by certain third parties. If Tribune breaches its obligation to provide us with data, or otherwise fails to perform its
obligations under our agreement, we would be unable to provide certain aspects of the TiVo service to our customers. This would have serious repercussions
on our brand and our ability to succeed in the market. We may be unable to secure an alternate source of guide data on acceptable terms.
If our arrangements with Broadcom or Tribune or with our third-party contract manufacturer were to terminate or expire without a replacement
arrangement in place, or if we or our manufacturers were unable to obtain sufficient quantities of these components or required program guide data from our
suppliers, our search for alternate suppliers could result in significant delays, added expense or disruption in product or service availability.
We depend upon third parties to provide supply chain services related to inventory management, order fulfillment, and direct sales logistics. We rely on
third party vendors to provide cost-effective and efficient supply chain services. Among other activities, these outsourced services relate to direct sales
logistics, including order fulfillment, inventory management and warehousing, and distribution of inventory to third party retailers. If one or several of our
third party supply chain partners were to discontinue services for us, our ability to fulfill direct sales orders and distribute inventory timely, cost effectively, or
at all, would be hindered which could in turn harm our business.
We are dependent on our major retail partners for distribution of our products to consumers. We currently rely on our relationships with major retail
distributors including Best Buy, Circuit City, and others for distribution of TiVo-enabled DVRs. We do not typically enter into long-term volume
commitments with our major retail distributors. If one or several of our major retail partners were to discontinue selling our products, the volume of TiVo-
enabled DVRs sold to consumers could decrease which could in turn harm our business.
Intellectual property claims against us could be costly and could result in the loss of significant rights.
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