Table:
|  |  |  | Year Ended December 31 |  |  |
| --- | --- | --- | --- | --- | --- |
|  | 2019 | % Change | 2018 | % Change | 2017 |
|  |  |  | (In thousands, except percentage data) |  |  |
| Cost of revenue | $704,535 | (1.8)% | $717,118 | (2.0)% | $731,453 |
| Gross margin percentage | 29.5% |  | 32.3% |  | 29.6% |
Paragraphs:
2019 vs 2018
Cost of revenue decreased for the year ended December 31, 2019, compared to the prior year, primarily due to net revenue declining.
Gross margin decreased for the year ended December 31, 2019 compared to the prior year. Gross margin was negatively impacted by the imposition of Section 301 tariffs originally announced in late 2018 and cost inefficiencies experienced in our new manufacturing locations outside of China, an increase in channel promotional activities relative to revenue as well as foreign exchange headwinds due to the strengthening of the U.S. dollar.
2018 vs 2017
Cost of revenue decreased for the year ended December 31, 2018 primarily due to improved product margin performance, lower proportionate provisions for warranty expense, and lower air freight costs compared to the prior year.
Gross margin increased for the year ended December 31, 2018 compared to the prior year primarily due to improved product margin performance, lower proportionate provisions for sales returns and warranty expense, favorable foreign exchange rate movements and lower air freight costs compared to the prior year.
For fiscal 2020, we expect gross margins to improve from fiscal 2019 primarily as our U.S. bound inventory will primarily not be subject to Section 301 tariffs in fiscal 2020. Forecasting gross margin percentages is difficult, and there are a number of risks related to our ability to maintain or improve our current gross margin levels. Our cost of revenue as a percentage of net revenue can vary significantly based upon factors such as: uncertainties surrounding revenue levels, including future pricing and/or potential discounts as a result of the economy or in response to the strengthening of the U.S. dollar in our international markets, and related production level variances; import customs duties and imposed tariffs; competition; changes in technology; changes in product mix; variability of stockbased compensation costs; royalties to third parties; fluctuations in freight and repair costs; manufacturing and purchase price variances; changes in prices on commodity components; warranty costs; and the timing of sales, particularly to service provider customers. We expect that revenue derived from paid subscription service plans will increase in the future, which may have a positive impact on our gross margin. From time to time, however, we may experience fluctuations in our gross margin as a result of the factors discussed above.
Question:
What accounted for the change in gross margin from 2017 to 2018?
Answer: Due to improved product margin performance, lower proportionate provisions for sales returns and warranty expense, favorable foreign exchange rate movements and lower air freight costs compared to the prior year.