Agilent Technologies, Inc., incorporated in Delaware in May 1999, is a global
diversified technology company that provides enabling solutions to markets within
the communications, electronics, life sciences and chemical analysis industries.
We currently have three primary businesses:
• electronic measurement;
• bio-analytical measurement; and
• semiconductor test solutions.
Our electronic measurement and semiconductor test solutions businesses focus
on growth opportunities in the communications and electronics industries, while
our bio-analytical measurement business focuses on core business and growth
opportunities in the life sciences industry and in the environmental, chemical,
food and petrochemical industries.
Electronic Measurement Customers
Agilents electronic measurement customers include contract manufactures, handset
manufacturers, NEMs who design, develop, manufacture and install network
equipment, and service providers who implement, maintain and manage communication
networks and services. We also engage in collaborative relationships with contract
manufacturers. Many of our customers purchase solutions across several of our
major product lines for their different business units. As of the end of fiscal
2005, no single customer represented greater than 10 percent of the net
revenue of the business.
The orders and revenues in many of the electronic measurement businesses are
seasonal, with our fourth quarter traditionally bringing larger volumes of business
and our first quarter generally showing reduced volumes. This is especially
true of products that we sell in the aerospace and defense industry as well
as those that are linked to consumer spending, including some of our communications
test equipment. However, the seasonal impact is tempered by the diversity of
the electronic measurement businesss products and customers, which span multiple
industries.
Bio-Analytical Measurement Customers
Our top 25 customers account for approximately 24 percent of revenue within
our bio-analytical measurement businesses. We have roughly 21,000 customers.
The bio-analytical measurement business is susceptible to seasonality in its
orders and revenues primarily based on U.S. government and large pharmaceutical
company budgets. The result is that our first and fourth fiscal quarters tend
to deliver the strongest profits for this group. However, general economic trends,
new product introductions and competition might overshadow this trend in any
given year.
Semiconductor Test Solutions Customers
Agilents semiconductor test solutions customers include many of the worlds
leading high-technology firms. Our semiconductor test solutions enable our customers
to speed their time to market and achieve volume production and high-quality
precision manufacturing. More than half of the business net revenue is generated
from outside the U.S.
Many of our customers purchase solutions across our major product lines for
their different business units. Generally, our customers are involved in producing
digital consumer and wireless products, computation, personal computers and
related peripherals, wireline communications, or enterprise networking and storage.
We also engage in collaborative, co-development relationships with electronics
industry leaders and sub-contract manufacturers.
The back-to-school and holiday seasons affect our semiconductor test business
to the extent that we are subject to the cycles of consumer electronics manufacturing.
Our customers include manufacturers who produce a wide range of consumer electronics
equipment requiring the test of semiconductors.
Electronic Measurement Competition
The market for electronic measurement equipment is highly competitive. Our
electronic measurement business competes with a number of significant competitors
in all our major product categories and across our targeted industries. In the
general purpose test market, we compete against companies such as Fluke Corporation
(a subsidiary of Danaher Corporation), Keithley Instruments, Inc., LeCroy
Corporation, National Instruments Corporation and Tektronix, Inc. In the
electronics manufacturing test market, we compete primarily against Teradyne, Inc.
In the FPD test market, we compete against Photon Dynamics, Inc., Applied
Komatsu Technologies and Shimadzu Corporation for large-panel test customers,
and primarily with Wintest Corp. in emerging FPD technologies. In the communications
test market our primary competitors are Acterna Corporation, Aeroflex Incorporated,
Anritsu Corporation, EXFO Electro-Optical Engineering, Inc., Ixia, Marconi
Corporation plc, Rohde & Schwartz GmbH & Co. KG, Spirent plc
and Tektronix, Inc. In addition, we compete with Telcordia Technologies, Inc.
and Hewlett-Packard Company ("HP") in the communications test market.
In the communications management and monitoring market our primary competitors
are Spirent plc, Tektronix, Inc. and Micromuse, Inc. Our EDA business
also has several software competitors, including Ansoft Corporation, APLAC Solutions
Corporation, Applied Wave Research, Inc. and Xpedion Design Systems, Inc.
Our electronic measurement business offers a wide range of products, and these
products compete primarily on the basis of product quality and functionality,
as well as performance and reliability.
Bio-Analytical Measurement Competition
The markets for analytical instruments in which we compete are characterized
by evolving industry standards and intense competition. Our principal competitors
in the life sciences arena include: Affymetrix, Inc., Applied Biosystems Inc.,
GE Healthcare, Invitrogen Corp., Thermo Electron Corp. and Waters Corp. Our
principal competitors in the chemical analysis arena include: Applied Biosystems Inc.,
Perkin Elmer Corp., Shimadzu Corporation, Thermo Electron Corp. and Varian, Inc.
Agilent competes on the basis of price, product performance, reliability, support
quality, applications expertise and global channel coverage.
Semiconductor Test Solutions Competition
The market for semiconductor test solutions is highly competitive. In the semiconductor
test solutions market, we compete mostly against Advantest Corp., Teradyne, Inc.,
Credence Systems Corp. and LTX Corp.
Most of our equipment competes primarily on performance or differentiated capabilities.
Other contributing factors include cost of test, sensitivity, speed, reliability
and yield.