Revenues

6 Months Ended

Jan. 01, 2021

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

Contract assets represent the Company’s rights to consideration where performance obligations are completed but the customer payments are not due until another performance obligation is satisfied. The Company did not have any contract assets as of either January 1, 2021 or July 3, 2020.

The Company incurs sales commissions and other direct incremental costs to obtain sales contracts. The Company has applied the practical expedient to recognize the direct incremental costs of obtaining contracts as an expense when incurred if the amortization period is expected to be one year or less or the amount is not material, with these costs charged to Selling, general and administrative expenses. Other direct incremental costs to obtain contracts that have an expected benefit of greater than one year are amortized over the period of expected cash flows from the related contracts, and the amortization expense is recorded as a reduction to revenue. Total capitalized contract costs as of January 1, 2021 and July 3, 2020 as well as the related amortization for the three and six months ended January 1, 2021 and January 3, 2020 were not material.

Contract liabilities relate to customers’ payments in advance of performance under the contract and primarily relate to remaining performance obligations under support and maintenance contracts. As of January 1, 2021 and July 3, 2020, contract liabilities were not material.

The Company applies the practical expedients and does not disclose transaction price allocated to the remaining performance obligations for (i) arrangements that have an original expected duration of one year or less, which mainly consist of support and maintenance contracts, and (ii) variable consideration amounts for sale-based or usage-based royalties for IP license arrangements, which typically range longer than one year. Remaining performance obligations are mainly attributed to right-to-access patent license arrangements and customer support and service contracts, which will be recognized over the remaining contract period. The transaction price allocated to the remaining performance obligations as of January 1, 2021 was $91 million, which is mainly attributable to the functional IP license and service arrangements. The Company expects to recognize this amount as revenue as follows: $20 million during the remainder of fiscal 2021, $40 million in fiscal 2022, and $31 million in fiscal 2023 and thereafter.

The Company’s disaggregated revenue information is as follows:

	Three Months Ended				Six Months Ended
	January 1, 2021		January 3, 2020		January 1, 2021		January 3, 2020
	(in millions)
Revenue by Product
HDD	$	1,909	$	2,396	$	3,753	$	4,804
Flash-based	2,034		1,838		4,112		3,470
Total Revenue	$	3,943	$	4,234	$	7,865	$	8,274
Revenue by End Market
Client Devices	$	2,131	$	1,797	$	4,077	$	3,413
Data Center Devices & Solutions	807		1,489		1,936		3,021
Client Solutions	1,005		948		1,852		1,840
Total Revenue	$	3,943	$	4,234	$	7,865	$	8,274
Revenue by Geography
Americas	$	945	$	1,296	$	2,024	$	2,609
Europe, Middle East and Africa	725		811		1,354		1,590
Asia	2,273		2,127		4,487		4,075
Total Revenue	$	3,943	$	4,234	$	7,865	$	8,274

The Company’s top 10 customers accounted for 43% and 41% of its net revenue for the three and six months ended January 1, 2021, respectively, and 44% and 43% of its net revenue for the three and six months ended January 3, 2020, respectively. For the three and six months ended January 1, 2021 and January 3, 2020, no single customer accounted for 10% or more of the Company’s net revenue.