This excerpt taken from the ACPW 10-K filed Feb 27, 2006.
Distribute and Market Our Products and Services Through Multiple Channels
We currently sell our products through multiple channels. We sell our high power CleanSource UPS products and our CleanSource DC products through leading original equipment manufacturer, or OEM, customers, as well as though our own Active Power branded sales channel.
We believe that the OEM sales channel enables us to rapidly introduce our products into established customer and dealer networks and promote the adoption of our innovative technologies. The OEM customers also give our technology credibility and accelerate its acceptance with end-user customers. To date, our most important OEM relationship is with Caterpillar, a worldwide distributor of the CleanSource UPS product line. Additionally, we have consolidated the domestic OEM distribution of our CleanSource DC product with a leading UPS company, Eaton Powerware.
Our Active Power branded sales channel consists of direct sales employees, sales agents and manufacturers representatives throughout North America and in several other global regions. This Active Power branded sales and distribution channel has increased our end-user interaction and allowed us to serve regions and customers not covered by our OEM customers. We believe this multiple channel distribution model provides us the broadest market coverage and gives us the best opportunity to efficiently maximize customer awareness and sell our products. We intend to increase our coverage via more manufacturers representatives as well as enlarging our direct sales force, both domestically and abroad. Internationally, we rely on our OEM customers such as Caterpillar, Fuji Electric (in Japan) and Vega Power (ASEA E&T) (in Korea) to sell our products. In addition, similar to our domestic strategy we have broadened our market reach by selling directly into countries that are not covered by our OEM customers.
We intend to further support our sales channels by increasing our marketing focus. We believe a structured approach is necessary to create an integrated marketing plan, so that our
- 8 -
go-to-market tactics support each channel, for each product, for each geography. We expect greater sales success given more sales tools, more lead generation, and more brand awareness.
We intend to expand our Services business by growing our offerings, expanding our coverage, and by adding Service personnel, both directly and through partnerships. We also believe that increased sales through our Active Power branded sales channel will increase our Services business due to better account control.