1082506--8/29/2007--OPENWAVE_SYSTEMS

related topics

{product, market, service}

{customer, product, revenue}

{financial, litigation, operation}

{system, service, information}

{control, financial, internal}

{acquisition, growth, future}

{property, intellectual, protect}

{product, candidate, development}

{personnel, key, retain}

{stock, price, operating}

{provision, law, control}

{operation, international, foreign}

{competitive, industry, competition}

{regulation, change, law}

{cost, operation, labor}

{product, liability, claim}

We have a history of losses and we may not be able to achieve or maintain consistent profitability. We are in a product transition phase and we may not be able to adequately develop or market products. Our industry changes rapidly as a result of technological and product developments, which may quickly render our products and services less desirable or even obsolete. If we are unable or unsuccessful in supplementing our product offerings, our revenue and operating results may be materially adversely affected. We rely upon a small number of customers for a significant portion of our revenues, and the failure to retain and expand our relationships with these customers could adversely affect our business. We depend on recruiting and retaining key management and technical personnel with telecommunications and Internet software experience who are integral in developing, marketing and selling our products. Our operating results are subject to significant fluctuations, and this may cause our stock price to decline in future periods. Our market is highly competitive and our inability to compete successfully could adversely affect our operating results. Our sales cycles are long, subjecting us to the loss or deferral of anticipated orders and related revenue. Because we depend substantially on international sales, any decrease in international sales would adversely affect our operating results. We may be unable to integrate acquisitions of other businesses and technologies successfully or to achieve the expected benefits of such acquisitions. Our customer contracts lack uniformity and often are particularly complex, which subjects us to business and other risks. We may not be successful in obtaining complete license usage reports from our customers on a timely basis, which could impact our reported results. We rely on estimates to determine arrangement fee revenue recognition for a particular reporting period. If our estimates change, future expected revenues could adversely change. Our technology depends on the adoption of open standards, which makes us vulnerable to competition. Our communications service provider customers face implementation and support challenges in introducing Internet-based services, which may slow their rate of adoption or implementation of the services our products enable. Our business depends on continued investment and improvement in communication networks by our customers. We may not be successful in forming or maintaining strategic alliances with other companies, which could adversely affect our product offerings and sales. Our recent restructuring of operations may not achieve the results we expect and may adversely affect our business. Our software products may contain defects or errors, which could result in rejection of our products, delays in shipment of our products, damage to our reputation, product liability and lost revenues. Our intellectual property could be misappropriated, which could force us to become involved in expensive and time-consuming litigation. Our products may infringe the intellectual property rights of others, subjecting us to claims for infringement, payment of license royalties, or other damages. We may be unable to effectively manage future growth, if any, that we may achieve. The security provided by our products could be breached, in which case our reputation, business, financial condition and operating results could suffer. Provisions of our corporate documents and Delaware law may discourage an acquisition of our business, which could affect our stock price. Risk Related to the Restatement of Our Prior Financial Results. We face risks related to the SEC and US Attorney inquiries regarding our historic and current stock option grants and practices, which have required significant management time and attention, caused us to incur significant accounting and legal expense and could require us to pay fines or other penalties. We face litigation risks relating to our past practices with respect to equity incentives that could have a material adverse effect on the Company.

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1082506--8/29/2007--OPENWAVE_SYSTEMS_INC