Significant Risk Concentrations

9 Months Ended

Sep. 30, 2012

Significant Risk Concentrations [Abstract]

Significant Risk Concentrations

9. Significant Risk Concentrations

Significant Customer

No customer accounted for 10% or more of total revenue for the three or nine months ended September 30, 2012. Ford Motor Company (“Ford”) accounted for $2.5 million, or 11% of total revenue, for the three months ended September 30, 2011 and $7.2 million, or 10% of total revenue, for the nine months ended September 30, 2011.

No customer accounted for 10% or more of total accounts receivable as of September 30, 2012 or December 31, 2011.

Significant Supplier

We have OEM Distribution Agreements (“ODAs”) with Microsoft Corporation (“Microsoft”) which enable us to sell Microsoft Windows Embedded operating systems to our customers in the United States, Canada, the Caribbean (excluding Cuba), Mexico, the European Union and the European Free Trade Association, which expire on June 30, 2013. We also have ODAs with Microsoft which allow us to sell Microsoft Windows Mobile operating systems in the Americas, Japan, Taiwan, Europe, the Middle East, and Africa which will expire on December 31, 2012 or January 31, 2013, depending on the territory.

Software sales under these agreements constitute a significant portion of our software revenue and total revenue. These agreements are typically renewed annually or semi-annually; however, there is no automatic renewal provision in any of these agreements. Further, these agreements can be terminated unilaterally by Microsoft at any time. Microsoft currently offers a rebate program to sell Microsoft Windows Embedded operating systems pursuant to which we earn money for achieving certain predefined objectives. Under this rebate program we earned $196,000 and $609,000 during the three and nine months ended September 30, 2012, respectively, and $212,000 and $555,000 during the three and nine months ended September 30, 2011, respectively. These rebates are accounted for as a reduction in software cost of revenue.