iRobot 2007 Annual Report Download - page 46

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Although our retail network is our primary distribution channel for our consumer products, the continued
investment in our direct-to-consumer offerings through the iRobot on-line store has resulted in this direct channel
increasing to 23.4% of home robots division revenue in fiscal 2007 compared to 16.0% in fiscal 2006. We have
established valuable databases and customer lists that allow us to target directly those consumers most likely to
purchase a new robot or upgrade. We believe we maintain a close connection with our customers in each of our
markets to provide an enhanced position from which to improve our distribution and product offerings.
In the United States, we maintain an in-house sales and product management team of 14 employees, and we
have an international sales force of 3 employees. Outside of the United States and Canada, we sell our consumer
products through distributors. Our consumer distribution strategy is intended to increase our global penetration and
presence while maintaining high quality standards to ensure end-user satisfaction.
Government and Industrial
We sell our government and industrial products directly to end users and indirectly through prime contractors
and distributors. While the majority of government and industrial products have been sold to date to various
operations within the U.S. federal government, we also sell to state and local as well as to international government
organizations. Our military products are sold overseas in compliance with the International Traffic in Arms
Regulations, or ITAR. We have sold our products to the governments of various countries in the past several years,
including the United Kingdom, France, Germany, Sweden, Norway, Israel, Australia, Republic of Korea, Singapore
and others.
Customers for our government products, and research & development contracts for the year ended Decem-
ber 29, 2007, include:
Robot Product Customers Research and Development Contracts
• U.S. Army • U.S. Army Future Combat Systems (FCS)
Program
• U.S. Marine Corp • U.S. Defense Advanced Research Projects
Agency (DARPA)
• U.S. Army and Marine Corp Robotic Systems
Joint Program Office
• U.S. Space and Naval Warfare Systems
Command (SPAWAR)
• U.S. Navy EOD Technical Division (Joint
Services Explosive Ordnance Disposal
Procurement Agency)
• U.S. Army Tank-Automotive and Armaments
Command (TACOM)
• U.S. Air Force • Technical Support Working Group (TSWG)
• Domestic Police and First Responders • U.S. Army Armament Research, Development
and Engineering Center (ARDEC)
• Foreign governments, including the United
Kingdom, France, Germany, Sweden, Norway,
• National Center for Defense Robotics (NCDR)
Israel, Australia, Republic of Korea, Singapore • Office of Naval Research (ONR)
Our government products are sold by a team of 12 government sales specialists with significant experience in
selling to government and defense agencies. All of these individuals have years of experience selling military
products to government procurement offices, both in the United States and internationally. We maintain a single
person direct sales and support presence in Europe.
Customer Service and Support
We also invest in our ongoing customer service and support. Consumer customer service representatives, the
majority of whom are employees of outsourced service organizations, are extensively trained on the technical
intricacies of our consumer products. Government and industrial customer representatives are usually former
military personnel who are experienced in logistical and technical support requirements for military operations.
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