Cisco 2011 Annual Report Download - page 59

such as multiple-element arrangements; the mix of financing arrangements provided to our channel partners and
customers; and final acceptance of the product, system, or solution, among other factors. In addition, certain
customers tend to make large and sporadic purchases, and the net sales related to these transactions may also be
affected by the timing of revenue recognition, which in turn would impact the net sales of the relevant segment.
As has been the case in our Emerging Markets segment from time to time, customers require greater levels of
financing arrangements, service, and support and this may occur in future periods, which may also impact the
timing of the recognition of revenue.
Fiscal 2010 Compared with Fiscal 2009
Net sales increased across all of our geographic segments in fiscal 2010 as compared with fiscal 2009. In our
view, the sales increase in fiscal 2010 was a result of the global demand recovery during fiscal 2010 in
comparison to the weakness we experienced for most of fiscal 2009. We had an increase in both net product sales
and service revenue in fiscal 2010 compared with fiscal 2009. From a customer market perspective, in fiscal
2010 we saw an improved demand environment for capital expenditures and balanced growth across all of our
customer markets.
Net Product Sales by Segment
The following table presents the breakdown of net product sales by segment (in millions, except percentages):
Years Ended July 30, 2011 July 31, 2010
Variance
in Dollars
Variance
in Percent July 31, 2010 July 25, 2009
Variance
in Dollars
Variance
in Percent
Net product sales:
United States and Canada ......... $17,705 $16,915 $ 790 4.7% $16,915 $14,866 $2,049 13.8%
Percentage of net product sales ..... 51.3% 52.2% 52.2% 51.0%
European Markets ............... 7,200 6,821 379 5.6% 6,821 6,579 242 3.7%
Percentage of net product sales ..... 20.9% 21.0% 21.0% 22.6%
Emerging Markets ............... 4,174 3,728 446 12.0% 3,728 3,377 351 10.4%
Percentage of net product sales ..... 12.0% 11.5% 11.5% 11.6%
Asia Pacific Markets ............. 5,447 4,956 491 9.9% 4,956 4,309 647 15.0%
Percentage of net product sales ..... 15.8% 15.3% 15.3% 14.8%
Total ...................... $34,526 $32,420 $2,106 6.5% $32,420 $29,131 $3,289 11.3%
United States and Canada
Fiscal 2011 Compared with Fiscal 2010
For fiscal 2011, as compared with fiscal 2010, net product sales in the United States and Canada segment
increased by 5%. Net product sales increased 3% in the United States and increased 31% in Canada. The increase
in net product sales was across most of our customer markets in the United States and Canada segment, led by
the net product sales growth in our commercial market, followed by smaller increases in net product sales growth
in both the service provider and enterprise markets. Net product sales in the consumer market declined during
fiscal 2011 as we exited the Flip Video cameras business and experienced weakness in sales of our networked
home products. Within the enterprise market, net product sales to the U.S. public sector decreased due to a
decrease in sales to the U.S. federal government, while sales to the state and local government submarket were
flat. The challenges experienced in fiscal 2011 within the public sector submarket of our enterprise market may
continue into fiscal 2012.
Fiscal 2010 Compared with Fiscal 2009
Net product sales in the United States and Canada segment increased during fiscal 2010 compared with fiscal
2009 due to the improvement in the economic environment in this segment. The increase in net product sales
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