Intel's Comment on Sales, Marketing and Customers
We sell our products primarily to OEMs and ODMs. ODMs provide design and manufacturing
services to branded and unbranded private-label resellers. In addition, we sell
our products to other manufacturers, including makers of a wide range of industrial
and communications equipment. Our customers also include those who buy PC components
and our other products through distributor, reseller, retail, and OEM channels
throughout the world.
Our worldwide reseller sales channel consists of thousands of indirect customers—systems
builders that purchase Intel microprocessors and other products from our distributors.
We have a boxed processor program that allows distributors to sell our microprocessors
in small quantities to customers of systems builders; boxed processors are also
available in direct retail outlets.
Hewlett-Packard Company accounted for 17% of our net revenue, Dell Inc. accounted
for 15% of our net revenue, and Lenovo Group Limited accounted for 12% of our
net revenue. No other customer accounted for more than 10% of our net revenue.
Our products are sold through sales offices throughout the world. Sales of
our products are typically made via purchase order acknowledgments that contain
standard terms and conditions covering matters such as pricing, payment terms,
and warranties, as well as indemnities for issues specific to our products,
such as patent and copyright indemnities. From time to time, we may enter into
additional agreements with customers covering, for example, changes from our
standard terms and conditions, new product development and marketing, private-label
branding, and other matters. Most of our sales are made using electronic and
web-based processes that allow the customer to review inventory availability
and track the progress of specific goods ordered. Pricing on particular products
may vary based on volumes ordered and other factors. We also offer discounts,
rebates, and other incentives to customers to increase acceptance of our products
Our products are typically shipped under terms that transfer title to the
customer, even in arrangements for which the recognition of revenue and related
cost of sales is deferred. Our standard terms and conditions of sale typically
provide that payment is due at a later date, generally 30 days after shipment
or delivery. Our credit department sets accounts receivable and shipping limits
for individual customers to control credit risk to Intel arising from outstanding
account balances. We assess credit risk through quantitative and qualitative
analysis, and from this analysis, we establish credit limits and determine whether
we will use one or more credit support devices, such as a parent guarantee or
standby letter of credit, or credit insurance.