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SEGMENT REPORTING
 12 Months Ended
Dec. 31, 2011
SEGMENT REPORTING  
SEGMENT REPORTING

NOTE 18—SEGMENT REPORTING

        With the Company's strategic shifts, beginning on January 1, 2011, the Company realigned its reporting segments to better reflect its new operating structure. Effective January 1, 2011, the new reporting segments are as follows:

  • •
    Equipment—Focused on the Company's equipment sales including network infrastructure and application products. Network infrastructure products mainly include broadband products. Network application products mainly include IPTV solutions and Wireless infrastructure technologies.

    •
    Services—Providing services and support of the Company's equipment products and also the new operational support segment.

      • Equipment Based Services—Services and support the Company provides to customers after their purchases of equipment.

        Operational Support Services—Providing new services through long-term revenue sharing arrangements with the cable operators and the Internet TV platform established by its subsidiary, iTV. This platform will be accessible by potential customers through a new website which will eventually distribute content to audiences on a global basis with a high-quality user experience consisting of:

      •
      Integrated multi-screen viewing from a single managed platform

      •
      Time and location shifting

      •
      Reliable HD streaming

      •
      Multi-language programming

      •
      Value-added interactive service, such as distance-learning, gaming and e-commerce

    • These revenues will be generated through advertising, subscription and software license fees.

        The Company's Chief Operating Decision Makers make financial decisions based on information it receives from its internal management system and currently evaluates the operating performance and allocates resources to the reporting segments based on segment revenue and gross profit. Cost of sales and direct expenses in relation to production are assigned to the reporting segments. The accounting policies used in measuring segment assets and operating performance are the same as those used at the consolidated level.

        Summarized below are the Company's segment net sales, gross profit and segment margin for the years ended December 31, 2011, 2010 and 2009 based on the current reporting segment structure. The Company has reclassified its previously reported segment information for the years ended December 31, 2010 and 2009 to conform to the current segment presentation.

 
   Years ended December 31,  
Net Sales by Segment
  2011   % of net
sales 		  2010   % of net
sales 		  2009   % of net
sales 		 
 
   (in thousands, except percentages)
  

Equipment

   $ 285,493     89 % $ 251,134     86 % $ 323,387     84 %

Services—Equipment Based Services

     34,539     11 %   40,401     14 %   62,957     16 %

              —Operational Support Services

     544     —     —     —     —     —  
                           

 

   $ 320,576     100 % $ 291,535     100 % $ 386,344     100 %
                           

 

 
   Years ended December 31,  
Gross profit by Segment
  2011   Gross
profit % 		  2010   Gross
profit % 		  2009   Gross
profit % 		 
 
   (in thousands, except percentages)
  

Equipment

   $ 107,030     37 % $ 57,567     23 % $ 39,149     12 %

Services—Equipment Based Services

     9,271     27 %   12,671     31 %   25,830     41 %

              —Operational Support Services

     (1,967 )   (362 )%   —     —     —     —  
                                 

 

   $ 114,334     36 % $ 70,238     24 % $ 64,979     17 %
                                 

 
   Years ended December 31,  
Segment Margin and Operating Income (Loss)
  2011   2010   2009  
 
   (in thousands)
  

Equipment

   $ 72,598   $ 15,850   $ (33,250 )

Services—Equipment Based Services

     9,162     13,174     24,569  

              —Operational Support Services

     (9,806 )   (206 )   —  
               

Total segment margin

     71,954     28,818     (8,681 )

General and Corporate

     (50,705 )   (102,540 )   (210,007 )
               

Operating Income (Loss)

   $ 21,249   $ (73,722 ) $ (218,688 )
               

        General and corporate expenses include all un-allocated expenses such as sales and marketing, general and administration, common R&D expenses, equity award related charges and restructuring and impairment charges.

        Sales are attributed to a geographical area based upon the location of the customer. Sales data by geographical area are as follows:

 
   Years Ended December 31,  
 
   2011   % of net
sales 		  2010   % of net
sales 		  2009   % of net
sales 		 
 
   (in thousands, except percentages)
  

Net Sales by Region

                                      

United States

   $ —     —   $ 5,903     2 % $ 78,806     21 %

China

     157,564     49 %   166,621     57 %   177,147     46 %

Japan

     96,257     30 %   48,217     17 %   29,361     7 %

India

     30,789     10 %   31,426     11 %   62,859     16 %

Other

     35,966     11 %   39,368     13 %   38,171     10 %
                           

 

   $ 320,576     100 % $ 291,535     100 % $ 386,344     100 %
                           

        Long-lived assets, consisting of property, plant and equipment, by geographical area are as follows:

 
   December 31,
2011 		  December 31,
2010 		 
 
   (in thousands)
  

United States

   $ 34   $ 38  

China

     11,339     3,713  

Other

     826     1,068  
           

Total long-lived assets

   $ 12,199   $ 4,819