1022652--3/16/2007--NOVATEL_WIRELESS

related topics

{product, market, service}

{customer, product, revenue}

{operation, international, foreign}

{acquisition, growth, future}

{property, intellectual, protect}

{product, liability, claim}

{cost, operation, labor}

{personnel, key, retain}

{regulation, change, law}

{stock, price, operating}

{product, candidate, development}

{regulation, government, change}

The market for wireless broadband data access products is highly competitive, and we may be unable to compete effectively. Our failure to predict and comply with evolving wireless industry standards, including 3G standards, could hurt our ability to introduce and sell new products. If we fail to develop and introduce new products successfully, we may lose key customers or product orders and our business could be harmed. If we fail to develop and maintain strategic relationships, we may not be able to penetrate new markets. Since we have historically depended, and continue to depend, upon only a small number of our customers for a substantial portion of our revenues, our business could be negatively affected by an adverse change in our dealings with only a few customers. The sale of our products depends on the demand for broadband wireless access to enterprise networks and the Internet. The marketability of our products may suffer if wireless telecommunications operators do not deliver acceptable wireless services. If we do not properly manage the growth of our business, we may experience significant strains on our management and operations and disruptions in our business. We currently rely on third parties to manufacture our products, which exposes us to a number of risks and uncertainties outside our control. We might forecast customer demand incorrectly and order the manufacture of excess or insufficient quantities of particular products. We depend on sole source suppliers for some components used in our products, and therefore the availability and sale of those finished products would be harmed if any of these suppliers is not able to meet our demand and in accordance with our production schedule and alternative suitable components are not available. Others might claim that our products infringe on their respective intellectual property rights, which may result in substantial costs, diversion of resources and management attention, harm to our reputation or interference with our current or prospective customer relations. We may not be able to license necessary third-party technology or it may be expensive to do so. We are subject to the risks of doing business abroad, which could negatively affect our international sales activities and our ability to obtain products from our foreign manufacturers. To the extent we enter into contracts that are denominated in foreign currencies and do not adequately hedge that exposure, fluctuations in exchange rates between the United States dollar and foreign currencies may affect our operating results. Our products may contain errors or defects, which could prevent or decrease their market acceptance and lead to unanticipated costs or other adverse business consequences. Our quarterly operating results may vary significantly from quarter to quarter and may cause our stock price to fluctuate. We incurred significant operating losses and negative cash flows between the date of our inception and the beginning of 2004 and if our revenue and gross margins decline or we are unable to increase our revenue and gross margins relative to our operating expenses, we may incur significant net losses and negative cash flow from operations. We may not be able to maintain and expand our business if we are not able to hire, retain and manage additional qualified personnel. Any acquisitions we make could disrupt our business and harm our financial condition and results of operations. Any changes to existing accounting pronouncements or taxation rules or practices may cause adverse fluctuations in our reported results of operations or affect how we conduct our business. We may not be able to develop products that comply with applicable government regulations.

Full 10-K form ▸

1022652--3/16/2007--NOVATEL_WIRELESS_INC