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Segment Information And Concentrations Of Risk
 3 Months Ended
Mar. 31, 2012
Segment Information And Concentrations Of Risk [Abstract]  
Segment Information And Concentrations Of Risk

7. Segment Information and Concentrations of Risk

Segment Information

The Company reports segment information based on the "management" approach. The management approach designates the internal reporting used by senior management for making decisions and assessing performance as the source of the Company's reportable segments.

The Company operates in the wireless broadband technology industry and senior management makes decisions about allocating resources based on the following reportable segments:

 

  •  

Mobile Computing Products segment—includes our MiFi products, USB and PC-card modems and Embedded Modules that enable data transmission and services via cellular wireless networks. All products within the segment represent a single product family.

 

  •  

M2M Products and Solutions segment—includes our intelligent asset-management solutions utilizing cellular wireless technology and M2M communication devices acquired with our acquisition of Enfora.

Segment revenues and segment operating income (loss) represent the primary financial measures used by senior management to assess performance and include the revenue, cost of goods sold, sales and other operating expenses for which management is held accountable. Segment expenses include sales and marketing, research and development, administration, and amortization expenses that are directly related to individual segments. Segment earnings (loss) also includes acquisition-related costs, purchase price amortization, restructuring, impairment and integration costs. The table below presents net revenue from external customers, income (loss) from operations and identifiable assets for our reportable segments (in thousands):

 

     Three Months Ended
March 31,		  
     2012     2011  

Net revenues by operating segment:

     

Mobile Computing Products

    $ 90,878      $ 49,796   

M2M Products and Solutions

      9,272        11,988   
  

 

 

    

 

 

  

Total

    $ 100,150      $ 61,784   
  

 

 

    

 

 

  

Operating loss:

     

Mobile Computing Products

    $ (3,470 )    $ (16,681 ) 

M2M Products and Solutions(1)

     (34,357 )      (5,389 )
  

 

 

    

 

 

  

Total

    $ (37,827 )    $ (22,070 ) 
  

 

 

    

 

 

  

 

     March 31,
2012		      December 31,
2011		  

Identifiable assets by reportable segment:

      

Mobile Computing Products

    $ 175,327       $ 181,180   

M2M Products and Solutions

      38,042         67,999   
  

 

 

     

 

 

  

Total

    $ 213,369       $ 249,179   
  

 

 

     

 

 

  

(1) Includes preliminary estimated impairment charges of $22.8 million against intangible assets and $6.5 million against goodwill.

 

The Company has operations in the United States, Canada, Europe, Latin America and Asia. The following table details the geographic concentration of the Company's assets in the United States, Canada, Europe, Latin America and Asia (in thousands):

 

     March 31,
2012		      December 31,
2011		  

United States

    $ 207,936       $ 243,030   

Canada

      3,933         4,764   

Europe

      142         280   

Asia

      1,358         1,105   
  

 

 

     

 

 

  
   $ 213,369       $ 249,179   
  

 

 

     

 

 

  

The following table details the concentration of the Company's net revenues by geographic region:

 

     Three Months Ended
March 31,		  
     2012     2011  

North America

      91.6 %      94.1 % 

Latin America

      4.5        —     

Europe / Middle East / Africa

      3.3        5.8   

Asia / Australia

      0.6        0.1   
  

 

 

    

 

 

  
     100.0 %      100.0 % 
  

 

 

    

 

 

  

Concentrations of Risk

Substantially all of the Company's net revenues are derived from sales of cellular wireless access products. Any significant decline in market acceptance of the Company's products or in the financial condition of the Company's existing customers would have an adverse effect on the Company's results of operations and financial condition.

A significant portion of the Company's net revenues are derived from a small number of customers. For the three months ended March 31, 2012, sales to our three largest customers accounted for 55%, 13% and 8% of net revenues. In the same period in 2011, sales to our three largest customers accounted for 34% 22% and 10% of net revenues. The Company outsources its manufacturing to four third-party contract manufacturers. If one or more of these manufacturers were to experience delays, disruptions, capacity constraints or quality control problems in manufacturing operations, product shipments to the Company's customers could be delayed or its customers could consequently elect to cancel the underlying product purchase order, which would negatively impact the Company's revenues and results of operations.