iRobot 2010 Annual Report Download - page 53

Download and view the complete annual report

Please find page 53 of the 2010 iRobot 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 132

  • 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
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

Strategic Alliances
Strategic alliances are an important part of our product development and distribution strategies. We rely on
strategic alliances to provide technology, complementary product offerings and increased and quicker access to
markets. We seek to form relationships with organizations that can provide best-in-class technology or market
advantages for establishing iRobot technology in new market segments.
Our strategy of working closely with third parties extends to the design of our products. By offering extensible
platforms designed to carry payloads, we have designed and manufactured our products to leverage the work of
those individuals and organizations that offer specialized technological expertise. The PackBot, the Roomba and
the Scooba robots are designed with open interfaces that allow third-party developers to add payloads to our robots,
improving their functionality.
Sales and Distribution Channels
We sell our products through distinct sales channels to the consumer and government and industrial markets.
For the fiscal years ended January 1, 2011, January 2, 2010 and December 27, 2008, sales to non-U.S. customers
accounted for 41.1%, 33.3% and 23.4% of total revenue, respectively. During this time period, sales to
non-U.S. customers in any single country did not account for more than 10% of total revenue in any fiscal year.
For the fiscal years ended January 1, 2011, January 2, 2010 and December 27, 2008, U.S. federal government
orders, contracts and subcontracts accounted for 38.4%, 36.9% and 40.3% of total revenue, respectively. For the
fiscal year ended January 1, 2011, we generated 17.4% of total revenue from The Boeing Company as a
subcontractor under U.S. federal government contracts.
Home Robots
In the United States and Canada, we sell our consumer products through a network of national retailers. In
2010, this network consisted of more than 30 retailers which often sell either one or some combination of our
products. Certain smaller domestic retail operations are supported by distributors to whom we sell product directly.
In support of these sales activities, we maintain an in-house sales and product management team. Internationally,
our products have been sold in approximately 40 countries, primarily through a network of in-country distributors
who resell to retail stores in their respective countries. These distributors are supported by our international sales
and product marketing team.
Our retail and distributor networks are our primary distribution channels for our consumer products. We also
offer products direct-to-consumer through our domestic and international on-line stores, representing 11.5% and
17.1% of total home robots division revenue for fiscal 2010 and 2009, respectively. 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, which provides an
enhanced position from which to improve our distribution and product offerings.
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, Bosnia, Lithuania, Pakistan, Qatar, Taiwan, South Africa and Canada.
Our government products are sold by a team of 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 direct sales and
support presence in Europe.
7
Form 10-K