Significant Risk Concentrations

12 Months Ended

Dec. 31, 2012

Significant Risk Concentrations [Abstract]

Significant Risk Concentrations

12. Significant Risk Concentrations

Significant Customer

No customer accounted for 10% or more of total revenue in 2012. Ford Motor Company (“Ford”) accounted for $9.7 million, or 10% of total revenue, in 2011.

Bluebird Soft, Inc. (“Bluebird”), a designer and manufacturer of handheld mobile devices, had an accounts receivable balance of $2.1 million, or 13% of total accounts receivable, as of December 31, 2012. Ford had an accounts receivable balance of $1.6 million, or 12% of total accounts receivable, as of December 31, 2011. No other customer accounted for 10% or more of total accounts receivable at December 31, 2012 or 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. Our current distribution agreements related to Windows Mobile expire in June 2014 with the exception of EMEA which expired on December 31, 2012 but which we expect to be renewed shortly. Our rights to distribute Windows Mobile operating systems in Korea ended on October 31, 2012. We sold $4.5 million of Windows Mobile operating systems in Korea in 2012 and $4.6 million in 2011.

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 in which we earn money for achieving certain predefined objectives. Under this rebate program we earned $888,000 in 2012 and $746,000 in 2011. These rebates are accounted for as a reduction in software cost of revenue.