them into the devices they build. OEMs typically seek to qualify two or more providers for each generation of prod-
ucts and generally will purchase products from those vendors for the life of that product. Many of our OEM customers
utilize just-in-time inventory management processes or supply chain business models that allow for "build-to-order,"
in which they do not build until there is a firm order. For certain OEMs, we maintain a base stock of finished goods
inventory in facilities located near or adjacent to the OEM's operations. We believe that our success depends on our
ability to maintain and improve our strong relationships with the leading OEMs.
erally enter into non-exclusive agreements with us for the purchase and redistribution of our products in specific terri-
tories.
smaller retailers. The retail channel complements our other sales channels while helping to build brand awareness for
us and our products. We also sell our branded products through our Web site.
to Item 1A of this Annual Report on Form 10-K. For additional information regarding revenue recognition, sales by
geographic region and major customer information, see Part II, Item 8, Notes 1 and 6 in the Notes to Consolidated
Financial Statements, included in this Annual Report on Form 10-K.
HGST, Samsung, Seagate, Toshiba and WD. In solid-state products we compete with a wide range of manufacturers,
from small startup companies to multinational corporations, including Micron Technology, Inc., Samsung Electronics
Co. Ltd., Seagate Technology LLC, STEC, Inc. and Toshiba Corporation.
form, fit and function standards and we believe there are no substantial barriers for existing competitors to offer
competing products. Hard drive manufacturers compete on the basis of product quality and reliability, storage
capacity, unit price, product performance, production volume capabilities, delivery capability, leadership in
time-to-market, time-to-volume and time-to-quality, service and support and ease of doing business. The relative
importance of these factors varies by customer and market and we believe that we are generally competitive in all of
these factors. Semiconductor media competes with hard drives along a range of product attributes. In particular, semi-
conductor media currently offers attractive functionality in consumer handheld applications requiring smaller form
factors, lower power and less storage capacity, such as smart phones and tablets. Semiconductor media offers greater
performance than hard drives in some storage applications. Advances in magnetic, optical or other data storage tech-
nologies could also result in competitive products for storing digital content with better performance or lower cost per
unit of capacity than our products. We monitor the advantages, disadvantages and advances of the full array of storage
technologies on an ongoing basis.
selves by emphasizing non-product related attributes such as availability and rapid response to our customers, which
requires accelerated design cycles, customer delivery, production flexibility and timely service and support. We
believe that trust in a manufacturer's reputation, its execution track record and the establishment of strategic relation-
ships have become important factors in the selection of a storage device, particularly in a rapidly changing technology
environment.