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6. Customer Concentrations
9 Months Ended
Sep. 30, 2013
Notes to Financial Statements  
Customer Concentrations

The Company sells its products primarily through high-volume retailers and distributors, Internet service providers, value-added resellers, PC system integrators, and original equipment manufacturers ("OEMs"). The Company supports its major accounts in their efforts to offer a well-chosen selection of attractive products and to maintain appropriate inventory levels.

 

Relatively few customers have accounted for a substantial portion of the Company’s revenues.  In the third quarter of 2013, three customers accounted for 68% of the Company’s total net sales. In the third quarter of 2012, three customers accounted for 64% of the Company’s total net sales. In the first nine months of 2013, three customers accounted for 67% of the Company’s total net sales. In the first nine months of 2012, three customers accounted for 65% of the Company’s total net sales. One customer accounted for 65% of net accounts receivable at September 30, 2013.

 

The Company’s customers generally do not enter into long-term agreements obligating them to purchase products. The Company may not continue to receive significant revenues from any of these or from other large customers. A reduction or delay in orders from any of the Company’s significant customers, or a delay or default in payment by any significant customer, could materially harm the Company’s business and prospects. Because of the Company’s significant customer concentration, its net sales and operating income (loss) could fluctuate significantly due to changes in political or economic conditions, or the loss, reduction of business, or less favorable terms for any of the Company's significant customers.