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9. SIGNIFICANT CUSTOMERS
12 Months Ended
Dec. 31, 2013
Risks and Uncertainties [Abstract]  
9. SIGNIFICANT CUSTOMERS

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

 

Relatively few customers have accounted for a substantial portion of the Company’s revenues.  In 2013 three customers accounted for 69% of our total net sales with our largest customer accounting for 51% of our net sales. At December 31, 2013, three customers accounted for 84% of our gross accounts receivable, with our largest customer representing 71% of our gross accounts receivable. During 2012 three customers accounted for 67% of the Company’s total net sales with our largest customer accounting for 54% of our net sales. At December 31, 2012, three customers accounted for 85% of our gross accounts receivable, with our largest customer representing 79% of our gross accounts receivable

 

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.