Annual Report
`
`2 0 1 3
`
`Innovation
`
`Execution
`
`Heritage
`
`Chrimar Systems, Inc.
`Exhibit 2040-1
`IPR2016-01426 USPN 9,019,838
`
`

`
`Financial Highlights
`
`NT$ in thousands
`
`2013
`
`2012
`
`% Change
`
`-6
`
`-15
`
`-43
`
`-32
`
`-17
`
` 0
`
`-19
`
`0 -
`
`1
`
`-28
`
`-2
`
`0 3
`
`Net Sales
`
` 30,588,474
`
` 32,466,950
`
`Gross Profit
`
`Operating Income
`
`Income Before Tax
`
`Net Income
`
`FX Rate (USD to NTD)
`
`Cash & Cash Equivalents
`
`Total Assets
`
`Working Capital
`
`Long Term Loans
`
`Shareholder’s Equity
`
`Shares Outstanding **
`
`FX Rate (USD to NTD)
`
`** in thousands
`
`8,067,782
`
`398,273
`
` 746,251
`
` 647,609
`
`29.7671
`
`3,275,650
`
`9,481,716
`
`692,755
`
`1,104,048
`
`778,964
`
`29.6239
`
`4,030,555
`
`24,457,789
`
`24,509,118
`
`6,781,450
`
`768,550
`
`6,848,008
`
`1,070,000
`
`13,347,713
`
`13,656,058
`
`647,580
`
`29.95
`
`647,580
`
`29.136
`
`D-Link Corporation | Annual Report 2013 | 01
`
`Chrimar Systems, Inc.
`Exhibit 2040-2
`IPR2016-01426 USPN 9,019,838
`
`

`
`Letter to Shareholders, Customers,
`Partners, and Employees
`
`ROGER KAO
`Chairman & CEO
`
`A.P. CHEN
`President
`
`Challenges and Opportunities
`In 2013, despite facing a challenging business environment,
`D-Link made several key achievements. D-Link Cloud Camera
`shipments grew by 36.3% over 2012, gaining number one
`market share in the United States and Europe. The number of
`mydlink™ Cloud Services Global registered users exceeded one
`million, and D-Link led the way as the first mover in the new,
`faster 802.11ac routers.
`
`There were still challenges. New competitors from China
`entered the market such as XiaoMi, Tencent, and Alibaba. The
`maturity of the Internet equipment market also intensified
`price competition, and the general macro economy was
`uncertain, all of which had an effect on D-Link’s performance.
`
`Conditions mildly improved in the U.S and Europe during
`the second half of 2013, and slow but stable growth in China
`pulled the global economy up. With elections to be held in
`India and Brazil, and Russia’s economy going into a recession
`following anti-government protests in Ukraine, D-Link is
`keeping a hopeful yet modest forecast for 2014.
`
`Financial Performance
`In 2013, D-Link’s global consolidated revenue totaled NT$30.6
`billion. Operating income was NT$398.3 million. Net income
`was NT$647.6million, compared to the previous year's NT$779
`million. A combined gross margin of 26.4% was seen in 2013,
`taking into account inventory provisional loss, which was
`slightly lower than the 26.8% in 2012. Operating profit margin
`dropped to 1.3% from 2.1% last year. Annual earnings per share
`were NT$1.06, versus the previous year’s NT$1.23. Substandard
`overall operating performance in 2013 was due mainly to
`global economic stagnancy and excessive price competition.
`
`Market Share
`According to technology research and advisor y firm
`Gartner1, in 2013, D-Link ranked first in the Enterprise WLAN
`market based on standalone access points (764,000 units),
`with a worldwide market share of 45.7%. In the Enterprise
`Ethernet Switch market, D-Link ranked third based on total
`port shipments (61.6 million ports), for a worldwide market
`share of 15.3%. Additionally, broadband products achieved
`
`annual shipments of 20.1 million units, and digital home
`products achieved annual shipments of 2.9 million units. Based
`on revenue share by product category 2, wireless products
`accounted for 34% of annual turnover, followed by 28% for
`switches, 18% for broadband devices, and 20% for digital home
`and others.
`
`A Strategy to Win in the Cloud Era
`D-Link has defined areas of strategic focus to compete in the
`Cloud Era. In the consumer market, the first of these areas is Cloud
`Cameras. D-Link’s IP cameras have risen to prominence in the
`fast-growing IP surveillance market. The unique mydlink platform
`features Zero Configuration setup that has helped differentiate
`the line of IP cameras, making them an industry favorite. Another
`strategic area is the portable router, an indispensable tool
`for users who need reliable and fast connectivity on the go.
`D-Link became a first mover in next- generation Wireless 11AC
`technology, which provides the bandwidth required by users
`carrying more mobile devices with larger screens and with higher
`data needs. Being first to market with this the new technology, it’s
`no accident that D-Link has become the number one worldwide
`provider for 11ac connectivity in the consumer market.
`
`The BYOD (Bring Your Own Device) trend is driving network
`infrastructure upgrades, transforming the SMB and enterprise
`markets dramatically. D-Link’s unified wireless solutions benefit
`the BYOB trend with features that provide flexibility, scalability,
`and offer powerful tools for deployment and management.
`Meanwhile, SMBs have started upgrading to smart switches
`from managed switches, enabling them to streamline IT
`operations and cut costs. These next generation smart switches
`greatly reduce complexity while offering superior management
`tools and language support. Another area of strategic focus is
`D-Link’s 4S package surveillance solutions, a line of devices that
`work together by combining Surveillance, Switches, Storage
`and Software as a ready-to-deploy solution. In 2013, these
`competitive advantages have beaten competitors and seized
`market opportunities worldwide.
`
`mydlink Cloud Services
`In 2013, the mydlink Cloud service gave users the features that
`they want – real-time monitoring, remote management, mobile
`access, media streaming, and file sharing – enhancements that
`fueled user base growth. That year, mydlink Cloud Services
`
`reached 1 million users; a testament to the evolution of the
`mobile app and the move towards the Internet of Things.
`D-Link’s Cloud Router, Cloud Camera, and Cloud Storage lines
`saw the launch of new models. New Cloud Access Points were
`introduced, bringing the benefits of D-Link’s exclusive Cloud
`Services to a wider market. mydlink Cloud Services offer a
`significant competitive advantage to D-Link, and as mobile and
`social trends mature, the company is already helping customers
`connect to more. D-Link’s Cloud Router, Cloud Camera, and
`Cloud Storage lines all saw the launch of new models. New
`Cloud Access Points were introduced, bringing the benefits of
`D-Link’s exclusive Cloud Services to a wider market.
`
`Innovation Today and Tomorrow
`In 2013, D-Link won several prestigious design awards, including
`two Red Dot Design Awards, a Good Design award, and three
`Taiwan Excellence Awards. The DMG-304P HomePlugAV
`PowerLine Wi-Fi Network Adapter and the DWR-730 Portable
`HSPA+ Mobile Router both received the Red Dot award for
`product design. The D-Link 4G Smart Router and the Wi-Vie
`Share Cam took home Red Dot Design Concept awards, and
`the DAP-1320 Wireless Range Extender took home a Good
`Design award. The DIR-505L SharePort™ Mobile Companion was
`honored with a Taiwan Excellence Gold award, and the DCS-
`6010L 360-Degree Network Camera and DCS-2310L Outdoor HD
`PoE Day/Night Network Cloud Camera both took home Taiwan
`Excellence Silver awards.
`
`Elsewhere, D-Link unveiled a new and highly intuitive router GUI.
`The new GUI complements the Zero Configuration capability,
`which has been a major differentiator of D-Link Cloud Cameras
`(and soon, other mydlink-enabled devices). D-Link also led the
`way in IPv6 adoption with more than 31 CPE devices certified
`in 2012, and added 50 more devices to the list in 2013, proving
`that innovation is thriving at D-Link.
`
`Global Service, Local Touch
`D-Link has offices in 67 countries around the world, making
`the brand widely recognized as a formidable multinational
`enterprise. In addition to our established leadership in Europe
`and the United States, D-Link is expanding aggressively in
`emerging markets such as Latin America, India, Russia, and the
`Middle East. Unfavorable economic conditions have slowed
`growth in developed markets, making emerging markets even
`more important to the company’s success, accounting for
`62.5% of consolidated revenue in 2013. D-Link’s global presence
`makes it highly responsive to local customer needs by focusing
`resources in developing localized applications, giving D-Link a
`critical advantage across markets and product segments.
`
`Outlook
`New mobile technologies are presenting exciting opportunities
`for D-Link in 2014. In the consumer segment, the widespread
`adoption of 4G LTE technology is making D-Link’s portable
`routers indispensable travel companions. Home automation is a
`new front where D-Link will compete. A complete line of smart
`plugs, motion sensor controllers and other Connected Home
`that can be controlled from mobile devices from anywhere with
`an Internet connection will be released. 802.11ac Wi-Fi continues
`to make traction as the standard in Wi-Fi connectivity where
`D-Link has already gained a strong foothold.
`
`D-Link has made headlines after becoming the worldwide leader
`in the consumer router market and IP cameras. In 2014, D-Link
`will focus on launching a varied product mix focusing less on low
`margin routers and other traditional network equipment. To keep
`up with the trends like IoT (Internet of things) for the smart city
`and home, D-Link will integrate hardware and software services
`with the mydlink platform to give customers new ways to use
`traditional appliances and devices.
`
`In the business sector, D-Link’s primary focus will be in solutions
`for small to medium businesses, targeting three strategic areas:
`unified wireless solutions, smart switches, and integrated one-
`stop surveillance solutions. D-Link’s offerings for the business
`market include Indoor Unified AP, Outdoor Unified AP, Unified
`Switch, and Unified Controller models. D-Link’s smart switches are
`making it easier for businesses to manage their network without
`headaches. D-Link Green technology is further boosting the
`smart switch market as businesses look to reduce their carbon
`footprint. The 4S integrated, one-stop surveillance solution is
`another key product offering, providing a total surveillance
`solution that integrates cameras for increased functional benefits.
`D-Link IP cameras with 802.11ac connectivity and mydlink cloud
`technology give users speed, convenience, and functionality.
`With more devices securing IPv6 adoption, businesses owners
`and network administrators will have peace of mind knowing
`their devices will still be compatible as the Internet keeps
`changing.
`
`Finally, in the Broadband sector, carriers and service providers are
`increasingly provisioning Wi-Fi networks for home-based data
`offload and business hotspots as part of their mobile broadband
`strategy, with this trend being a key growth driver for D-Link’s
`telecom business. Service providers also face competitive
`pressure to develop new revenue streams from their existing
`customer base and their relationships with content owners by
`offering higher bandwidth and additional services.
`
`As D-Link pursues these opportunities in 2014, we wish to thank
`our shareholders for their long-term confidence in our vision,
`and also extend our gratitude to the management team and
`our valued staff worldwide, who continue to uphold the spirit of
`sound management, sustainable development, and corporate
`social responsibility. Through our concerted efforts, D-Link will
`meet its performance targets, achieving continued growth and
`prosperity.
`
`ROGER KAO
`Chairman & CEO
`
`A.P. CHEN
`President
`
`1 Source: Gartner, Market Share: Enterprise Network Equipment by Market Segment,
`
` Worldwide, 4Q13 and 2013.
`
`2 Source: D-Link 2013 financial report
`
`02 | D-Link Corporation | Annual Report 2013
`
`D-Link Corporation | Annual Report 2013 | 03
`
`Chrimar Systems, Inc.
`Exhibit 2040-3
`IPR2016-01426 USPN 9,019,838
`
`

`
`Globalization
`through Localization
`
`LOCAL MARKET UNDERSTANDING, INTERNATIONAL PRESENCE
`Unity: a strategy for success executed on a global scale. D-Link
`Confident in the resources of D-Link headquarters to develop
`is the worldwide leader and an award-winning designer,
`and deliver state-of-the-art networking solutions, each local
`developer, and provider of Wi-Fi and Ethernet networking,
`business – regardless of its location around the world –
`broadband, multimedia, voice and data communications, and
`effectively penetrates the market. The Company’s innovative
`digital electronics solutions. D-Link has systematically expanded
`products provide solutions for home and businesses, each built
`its market share by penetrating geographic targets through a
`with standards-based reliability. D-Link has become a trusted
`strategy of establishing in-country business units supported by a
`international brand that connects people to their lives, to their
`strong corporate foundation.
`work, and to each other.
`
`London, U.K.
`
`Moscow, Russia
`
`Beijing, China
`
`Fountain Valley, U.S.A.
`
`São Paulo, Brazil
`
`Taipei, Taiwan
`D-Link Global Headquarters
`
`Singapore
`
`04 | D-Link Corporation | Annual Report 2013
`
`D-Link Corporation | Annual Report 2013 | 05
`
`Chrimar Systems, Inc.
`Exhibit 2040-4
`IPR2016-01426 USPN 9,019,838
`
`

`
`investments last year, following the United
`States ($638 billion), China ($173 billion),
`Japan ($172 billion), United Kingdom
`($110 billion), Germany ($101 billion) and
`France ($76 billion).
`
`In 2013, India's networking market saw
`growth of 15% to 18% through adoption
`of mobile devices, data and Video/Voice
`traffic, and cloud applications. D-Link’s
`reputation as a provider of end-to-end
`networking solutions helped lead the
`market in products and solutions for the
`SMB/SME sector.
`
`In the consumer space, D-Link India
`introduced the fifth generation wireless
`standard by launching a host of 11AC
`wireless routers and adapters with cloud
`functionality. Innovative products like the
`DSM-260 and the BabyCam gave D-Link an
`edge over the competition. In 2013, D-Link
`enhanced its presence in the IP Surveillance
`segment through new business in the
`enterprise segment. A focus in the
`structured cabling business contributed
`to substantial revenue growth. D-Link
`secured large projects in Government and
`Education, Retail/Manufacturing, Telecom,
`Corporate, Hospitality, Banking (BFSI) and
`others.
`
`In early 2013, the crashing rupee and
`uncertainty in the Indian economy led
`to a weak business sentiment. However
`D-Link India’s focused market strategy
`and practical business approach allowed
`the company to sail through these tough
`times. D-Link India successfully managed
`to record relentless growth. 2013 closed
`with 40% growth year-over-year with D-Link
`India continuing to break records and
`witnessing the highest quarterly turnover in
`Q3 (JAS) at 127 Cr., along with the highest
`yearly turnover at INR 425 Cr.
`
`Emerging Markets, Asia-
`Pacific Region
`
`In 2013, Emerging Markets and the Asia Pacific Region accounted for 65% the company’s total sales
`revenue
`
`Emerging markets continued to be the major engine of
`D-Link’s expansion, with steady year-on-year growth in Russia,
`Latin America, the Asia Pacific region, the Middle East, and
`Africa. D-Link succeeded by increasing local brand awareness,
`maintaining competitive price points, and developing
`customized solutions that meet customer needs.
`
`In Russia, despite fierce competition and a lackluster economy,
`D-Link retained its dominant position as a key market player
`in the Small Office and Home (SOHO) segment. D-Link also
`continues to lead the Russian market in the enterprise sector
`with its access layer switches for ISPs and the budget sector
`of the video surveillance market. D-Link Russia continued
`to expand its operations and now has a total of 40 offices
`in the country with 19 offices in the CIS (Commonwealth of
`Independent States). This expansion is strengthening brand
`presence in major Russian and CIS retail networks. Since the
`opening of the toll-free All-Russia Call Center, there has been an
`increase in academic partners and authorized training centers at
`leading Russian and CIS Universities and specialized secondary
`schools. Part of the success in the academic arena comes from
`D-Link Russia’s participation in a number of social projects, such
`as IT Planet, the Delphic Games, and WorldSkills Russia 2013,
`among other academic competitions.
`
`D-Link’s strategy in Russia includes customization of products for
`state and commercial organization projects, training seminars,
`
`educational publications, and marketing and technical support
`for partners. The bestselling products in 2013 were Internet
`gateways, routers, and xDSL products. The mydlink and new
`802.11ac product lines are earning recognition in the Russian
`market and promise further growth. Plans include expanding
`local production, extending the distribution network, increasing
`cooperation with educational institutions, and further developing
`the local partner network.
`
`In Latin America, 2013 saw growth in the networking market
`through the adoption of mobile technology, data analysis,
`and cloud computing in the region. Analysts estimate that
`the Brazilian market generated approximately US$2 billion in
`revenue in cloud computing services. Businesses occupying the
`networking sector will multiply throughout the country and
`generate revenues of approximately $4.5 billion. While the lack of
`telecommunications infrastructure outside major metropolitan
`areas is still a barrier for widespread adoption of cloud computing
`services, research shows that cloud computing is a high priority
`for companies operating in Brazil.
`
`In Brazil, growth in the information technology (IT ) market
`was 10.9% at $60 billion, almost double the global average of
`5.9%. The majority of the revenue from the IT industry in Brazil
`remained in the hardware segment, which generated $35.3
`billion, followed by services, with $15.4 billion, and software,
`with $9.4 billion. Brazil ranked seventh in world rankings of IT
`
`CASE STUDY
`BANCO DO BRASIL
`The D-Link Brazil team worked with Banco do Brasil to standardize their switches
`using a D-Link solution and making D-Link the sole vendor for all branch offices in the
`country. Banco do Brasil, a hundred year-old institution and the biggest state-owned
`bank in Latin America, invited all switch vendors to participate in a public hearing to
`announce its switching branch office project. With more than 12,000 branches serving
`a large majority of the Latin American population, Banco do Brasil needed to ensure
`that its systems operated with minimal disruption while maintaining high speed
`connectivity.
`
`The bank had two major goals in this project; they needed a robust scalable network,
`and a way to effectively manage devices that are part of the infrastructure. D-Link
`Brazil cooperated with a D-Link Gold Partner, to work with Banco do Brasil to manage
`the relationship, provide the necessary equipment, and plan a solution that meets
`all of the bank’s needs. D-Link Brazil solved both of the bank’s needs by working with
`ADTK to customize a solution using D-Links enterprise switches with D-View network
`management software.
`
`D-Link Brazil’s strategy of focusing on the customer as its competitive advantage
`allowed them to beat HP and Cisco for the project. Using the D-View application to
`localize and tailor specific functions per Banco do Brasil’s requirements meant that
`D-Link was the more attractive choice for a complete networking solution.
`
`D-Link delivered more than 11,000 DES-3028s and DES-3010Gs, 10,500 DES-3200-28Ps
`and DES-3200-10s, 9,000 DES-3200-28Ps, and 2,500 DES-3200-10s over the course of
`the implementation.
`
`End-User Spending on Enterprise Network Equipment by Region,
`2011-2018(Millions of Dollars)-Asia Pacific, Japan, Latin America, Middle
`East & Africa
`
`15,595
`
`16,360
`
`14,725
`
`17,068
`
`13,145
`
`13,987
`
`12,116
`
`17,560
`
`2011
`
`2012
`
`2013
`
`2014
`
`2015
`
`2016
`
`2017
`
`2018
`
`Source: Gartner, Inc., “Forecast: Enterprise Network Equipment by Market Segment, Worldwide, 2011-2018,
`2Q14 Update" By Christian Canales, Naresh Singh, Joe Skorupa and Severine Real. 30 June 2014
`Chart create by D-Link based on Gartner data.
`
`The Gartner Report(s) described herein, (the "Gartner Report(s)") represent(s) data, research opinion or viewpoints published, as part
`of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and are not representations of fact. Each Gartner Report speaks as of
`its original publication date (and not as of the date of this Filing) and the opinions expressed in the Gartner Report(s) are subject to
`change without notice.
`
`06 | D-Link Corporation | Annual Report 2013
`
`D-Link Corporation | Annual Report 2013 | 07
`
`Chrimar Systems, Inc.
`Exhibit 2040-5
`IPR2016-01426 USPN 9,019,838
`
`

`
`In 2014, D-Link Europe will be focusing
`efforts on finding new routes to market
`by approaching new channel partners
`that specialize in areas such as maternity,
`pharmacy, travel, mobile and digital
`lifestyles. This will further develop the
`company’s standing as a leader in Wireless
`AC. These new routes to market also
`support the crucial launch of D-Link’s
`range of Connected Home products,
`which will see a significant push in the
`coming year.
`
`In the Telco arena, 2014 will be the year
`for LTE across Europe and D-Link will
`be working closely with key providers
`in this sector. D-Link Europe will also
`use its position as a leading vendor
`in IP Surveillance to open up further
`opportunities in this sector and continue
`to grow D-Link Europe’s IP Surveillance
`business.
`
`CASE STUDY
`PASSENGER AND TRAFFIC SURVEILLANCE SYSTEM, BUDAPEST
`The Centre for Budapest Transport (BKK) received funding from the EU to upgrade its
`tram services across the city. The tram line, opened in 1984, is one of the busiest tram
`lines in Budapest with trams running every three minutes during rush hour. This heavy
`use has resulted in the need for an extensive upgrade while keeping passenger safety
`as the number one priority.
`
`As part of the upgrade to the existing infrastructure, BKK required a solution to provide
`passenger security, monitor the network, and prevent damage and vandalism. After
`examining potential solutions, the management of the BKK decided to implement
`an IP-based surveillance system with high-resolution and vandal-proof night-vision
`cameras. Based on their versatility and value, they chose D-Link IP cameras.
`
`BKK used 88 DCS-6314 Full HD WDR Varifocal Day and Night Outdoor Dome Network
`Cameras to monitor passengers waiting for trams at all stops along the route. The
`ceiling-mounted cameras use a 1.3MP sensor and varifocal lens to provide crystal
`clear and remotely adjustable images at every stop. This, coupled with a built-in IR LED
`illuminator for low-light and night-vision, reduces vandalism day and night.
`
`BKK also installed five DCS-6210 Outdoor Full HD Vandal-Resistant Mini Fixed Dome
`Network Cameras to monitor elevators and report malfunctions. The camera’s
`compact size makes it perfect for installing in confined environments.
`
`Both the DCS-6314 and DCS-6210 cameras use the NETAVIS VMS system, a scalable
`server-based surveillance system that fully integrates with D-Link cameras, allowing
`the BKK to play back live and archived footage easily. The NETAVIS VMS system can
`also record live video in HD quality. With live video monitoring from the control room,
`Emergency Services can be deployed promptly and warnings can be announced
`through loudspeakers. Based on the success of the project, BKK plans to expand this
`system to monitor bridge tracks around the city using the D-Link DCS-7513 cameras.
`Their high-resolution 3MP images and long distance infra-red LEDs make it the right
`choice for the BKK. With plans for tram line upgrades, there are further opportunities
`for D-Link to supply this growing market.
`
`End-User Spending on Enterprise Network Equipment by Region,
`2011-2018(Millions of Dollars)-Eastern and Western Europe
`
`10,027
`
`9,915
`
`9,847
`
`9,743
`
`9,594
`
`9,305
`
`9,213
`
`9,407
`
`2011
`
`2012
`
`2013
`
`2014
`
`2015
`
`2016
`
`2017
`
`2018
`
`Source: Gartner, Inc., “Forecast: Enterprise Network Equipment by Market Segment, Worldwide, 2011-2018,
`2Q14 Update" By Christian Canales, Naresh Singh, Joe Skorupa and Severine Real. 30 June 2014
`Chart create by D-Link based on Gartner data.
`The Gartner Report(s) described herein, (the "Gartner Report(s)") represent(s) data, research opinion or viewpoints published, as part
`of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and are not representations of fact. Each Gartner Report speaks as of
`its original publication date (and not as of the date of this Filing) and the opinions expressed in the Gartner Report(s) are subject to
`change without notice.
`
`Europe
`
`European economic recovery led to dramatic increases in IP surveillance solutions and consumer
`services
`
`The economic road to recovery across Europe began
`tentatively in 2013, with investment in new infrastructure
`rising. This upturn has been reflected by strong growth in
`the D-Link Assist service offering, where revenue was up an
`incredible 120% on last year. In parallel, across Europe, D-Link
`has again seen strong growth in its complete portfolio of IP
`Video Surveillance products, with revenue up an impressive
`50%, and the range of mobile products seeing a 26% increase
`compared with last year.
`
`Key products across the region in the past year have included
`the excellently received DGS-1510 range of smart switches,
`which have kept D-Link at the forefront of the networking
`arena. In addition, continuous additions and improvements
`to the range of IP Surveillance cameras meant that end-user
`requirements – from the simplest of home cameras, right up to
`enterprise-class installations – were met. These have continued
`to be supported by a range of infrastructure solutions that
`enable customers to receive a comprehensive solution.
`
`In 2013, the key focus for the Business Solutions division was to
`grow IP Surveillance sales and gain market share in the Smart
`and PoE switch market. On top of this, increasing business
`wireless sales and the delivery of more D-Link Assist contracts
`through the channel added value to the overall proposition. In
`the consumer market, the focus was to drive sales of mydlink™
`Cloud Services products, including routers, cameras and
`storage, while also promoting the dlinkgo range to compete at
`the lower-end of the market. In terms of D-Link’s relationships
`with Telco/ISPs across the region, the focus was on ADSL/VDSL,
`DOCSIS 3.0 Cable, 4G/LTE and GPON, and investing resources
`on key technologies and accounts.
`
`Building relationships with professional security firms has also
`contributed to D-Link Europe’s sales and growth. Meanwhile,
`the education sector continues to be a key focus for both
`networking and IP Surveillance products. Across the region,
`D-Link Europe has also increased its presence amongst key
`players in the retail channel thanks to D-Link’s comprehensive
`home surveillance solutions.
`
`D-Link Europe has worked hard over the past year to continue
`to strengthen its relationships within the channel. Additionally,
`building relationships with new channel partners in areas
`such as the traditional CCTV installer market has continued
`to be receptive thanks to D-Link’s flexible alternatives to their
`traditional solutions.
`
`The launch of the mydlink™ EyeOn™ Baby Monitor was a
`key promotion for D-Link Europe in 2013 and propelled the
`company into a completely new marketplace. Supported
`by an attention-grabbing deal with 20th Century Fox and
`comprehensive social media campaign, the product has been
`a hit across Europe and has enabled new channels to open in
`leading retail outlets across the region.
`
`Other notable efforts include the launch of a much simpler to
`navigate company website, and an increased presence on social
`media across the region. Partner support has been bolstered
`with an updated partner program and portal, and training
`materials in the D-Link Academy.
`
`08 | D-Link Corporation | Annual Report 2013
`
`D-Link Corporation | Annual Report 2013 | 09
`
`Chrimar Systems, Inc.
`Exhibit 2040-6
`IPR2016-01426 USPN 9,019,838
`
`

`
`to the company’s VIP+ partner program
`continued to make it very profitable for
`integrators to lead with D-Link-based
`solutions.
`
`D-Link also worked with major service
`providers to win a series of deals for the
`company to provide broadband solutions
`to a wide customer base.
`
`CASE STUDY
`HISTORICAL LANDMARK GETS STATE-OF-THE-ART NETWORK
`Menger Hotel enhances guest experience and business productivity with D-Link
`Solutions
`
`The Menger Hotel, an impressive structure boasting 310 rooms, opened on January
`31, 1859. The historical hotel is located in downtown San Antonio, Texas, immediately
`adjacent to the historic Alamo, River Walk and other tourist attractions. Over the years,
`the Menger has become one of the best known hotels in the southwest, having
`hosted celebrities and historical figures including Robert E. Lee, Theodore Roosevelt,
`Babe Ruth, and Mae West.
`
`Despite its historical landmark status, the Menger found itself at a disadvantage when
`it came to providing Internet access for its guests and business customers. To replace
`the outdated DSL service in guest rooms, lackluster wireless access in the lobby, and
`haphazard back office network, the Menger Hotel chose Beacon Enterprise Solutions
`to design and implement a robust unified wired/wireless network based on D-Link
`components.
`
`A complete site survey of the Menger Hotel property determined that the stone walls
`in the hotel’s original footprint were largely impenetrable and the standard dropped
`ceilings in the newer areas of the hotel were an obstacle to wireless signals or cabling
`to APs. To provide the performance, range and coverage needed for guest rooms and
`the meeting room areas, Beacon chose a range of D-Link switches and access points
`for a total wireless coverage solution.
`
`End-User Spending on Enterprise Network Equipment by Region,
`2011-2018(Millions of Dollars)-North America
`
`18,824
`
`19,482
`
`19,664
`
`19,811
`
`19,801
`
`19,989
`
`16,350
`
`17,383
`
`2011
`
`2012
`
`2013
`
`2014
`
`2015
`
`2016
`
`2017
`
`2018
`
`Source: Gartner, Inc., “Forecast: Enterprise Network Equipment by Market Segment, Worldwide, 2011-2018,
`2Q14 Update" By Christian Canales, Naresh Singh, Joe Skorupa and Severine Real.30 June 2014
`
`The Gartner Report(s) described herein, (the "Gartner Report(s)") represent(s) data, research opinion or viewpoints published,
`as part of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and are not representations of fact. Each Gartner Report
`speaks as of its original publication date (and not as of the date of this Filing) and the opinions expressed in the Gartner Report(s)
`are subject to change without notice.
`
`North America
`
`D-Link expanded product breadth by meeting customer needs, with growth coming from key
`markets such as home surveillance and business network infrastructure
`
`Vacclav / Shutterstock.com
`
`Riding the wave of increased awareness and adoption of
`IP based Wi-Fi solutions for home security and surveillance,
`D-Link expanded product lines and distribution to meet the
`market’s growing needs and extend market share. 2013 saw a
`rapid expansion of D-Link’s line of Wi-Fi cameras that include
`features such as pan and tilt, HD and outdoor weatherproofing.
`Increased expansion into retail brick-and-mortar stores through
`initiatives like the addition of five cameras onto BestBuy
`shelves and ecommerce placements helped D-Link extend
`market leadership in this key category, showing a healthy 39%
`share according to NPD. D-Link also introduced the World’s
`first IP camera with the latest Wi-Fi standard of 802.11ac and a
`USB-based recording solution offering simultaneous storage,
`streaming and playback of video from up to four cameras.
`
`In 2013, D-Link North America extended market share
`predominately via increased adoption of IP-based Wi-Fi
`solutions for home security and surveillance. The year saw
`rapid expansion of D-Link’s line of Wi-Fi cameras that include
`pan and tilt, HD, and outdoor weather-proofing features.
`Products got into more retail brick-and-mortar stores,
`including the addition of five cameras onto Best Buy shelves.
`Ecommerce placements extended market leadership as well,
`showing a healthy 39% share, according to consumer market
`research group NPD.
`
`On the home networking front, D-Link North America
`was a first mover in the new 802.11ac Wi-Fi standard after
`launching a line of cylinder shaped 802.11ac router