Letter To Shareholders - Mitac

management, PC data transmission etc), design, and pricing.
MiTAC is devoted to developing PND, AVN, mobile TV with embedded GPS,
out door navigation devices …etc. There are more and more features added
everyday to PNDs so the products will be more dedicated and practical and can
create many highly-added values. PND’s navigation combined with digital maps
and well-designed navigation software will make the PND a must-have gadget in
the future.
D. The market keeps growing
In addition to working at key markets, such as North America and Europe,
MiTAC will emphasize on developing markets, including in Mainland China,
Japan and Eastern Europe.
E. E-supply chain
For the needs of MiTAC’s global production and to separate local markets,
MiTAC has not only modularized all designs for key components, but also
integrated the upstream vendors into B2B in order to use the Just-In-Time system
to lower our inventory and reduce our risk and to give our clients an
always-on-time delivery service.
(3) Unfavorable factors to the future and the way to deal with
A. Intense competition: Will all major vendors entering the handheld device market,
Canalys has predicted that prices will become to drop. The average price in 2010
for a PND device will be US$ 100. Additionally, the functions of PND and
wireless communications products continue to integrate. GPS smart phones will
become a necessity, which will cause an even more competitive market.
Our fallback measures:
a. Closely observe R&D innovation, strengthen our R&D results, shorten product
development times, and keep developing new models; utilize differences in
products and mass produce to maintain our profitability.
b. Increase customers’ satisfaction from providing design, mass production and
backup support services and try to ally with major brands in the world.
c. Utilize our global sales and distribution logistic model and build a
comprehensive material system, a value chain and the backup support.
B. Key components remain under control of foreign vendors and software and
hardware integration:
Fallback plans:
a. Maintain a good relationship with providers; in the meantime, train people who
can operate platform and communication components.
b. Find more suppliers for key components: Seek alternative suppliers to ensure
ample sources and gain competitive prices. In addition, maintain good
relationship with domestic vendors for more options.
c. Use mass amounts to lower unit price: Our several products are top sellers, so
we won orders from large OEM/ODM companies; therefore, the procurement
cost has been greatly reduced.
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