Symantec 2014 Annual Report Download - page 95

Indirect Sales Channels. A significant portion of our revenues is derived from sales through indirect channels,
including distributors that sell our products to end-users and other resellers. This channel involves a number of
risks, including:
• Our lack of control over the timing of delivery of our products to end-users
• Our resellers and distributors are generally not subject to minimum sales requirements or any
obligation to market our products to their customers
• Our reseller and distributor agreements are generally nonexclusive and may be terminated at any time
without cause
• Our resellers and distributors frequently market and distribute competing products and may, from time
to time, place greater emphasis on the sale of these products due to pricing, promotions, and other
terms offered by our competitors
• The consolidation of electronics retailers has increased their negotiating power with respect to
hardware and software providers such as us
OEM Sales Channels. A portion of our revenues is derived from sales through our OEM partners that incorporate
our products into, or bundle our products with, their products. Our reliance on this sales channel involves many
risks, including:
• Our lack of control over the volume of systems shipped and the timing of such shipments
• Our OEM partners are generally not subject to minimum sales requirements or any obligation to
market our products to their customers
• Our OEM partners may terminate or renegotiate their arrangements with us and new terms may be less
favorable due to competitive conditions in our markets and other factors
• Sales through our OEM partners are subject to changes in general economic conditions, strategic
direction, competitive risks, and other issues that could result in a reduction of OEM sales
• The development work that we must generally undertake under our agreements with our OEM partners
may require us to invest significant resources and incur significant costs with little or no assurance of
ever receiving associated revenues
• The time and expense required for the sales and marketing organizations of our OEM partners to
become familiar with our products may make it more difficult to introduce those products to the market
• Our OEM partners may develop, market, and distribute their own products and market and distribute
products of our competitors, which could reduce our sales
If we fail to manage our sales and distribution channels successfully, these channels may conflict with one
another or otherwise fail to perform as we anticipate, which could reduce our sales and increase our expenses as
well as weaken our competitive position. Some of our distribution partners have experienced financial difficulties
in the past, and if our partners suffer financial difficulties in the future because of general economic conditions or
for other reasons, these partners may delay paying their obligations to us and we may have reduced sales or
increased bad debt expense that could adversely affect our operating results. In addition, reliance on multiple
channels subjects us to events that could cause unpredictability in demand, which could increase the risk that we
may be unable to plan effectively for the future, and could result in adverse operating results in future periods.
Over the long term we intend to invest in research and development activities, and these investments may
achieve delayed, or lower than expected, benefits which could harm our operating results.
While we intend to focus on managing our costs and expenses, over the long term, we also intend to invest in
research and development activities as we focus on organic growth through internal innovation. We are likely to
recognize the costs associated with these investments earlier than some of the anticipated benefits, and the return
on these investments may be lower, or may develop more slowly, than we expect. If we do not achieve the
benefits anticipated from these investments, or if the achievement of these benefits is delayed, our operating
results may be adversely affected.
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