278352--3/3/2006--SYMBOL_TECHNOLOGIES

related topics

{customer, product, revenue}

{operation, international, foreign}

{product, market, service}

{cost, operation, labor}

{control, financial, internal}

{cost, regulation, environmental}

{property, intellectual, protect}

{acquisition, growth, future}

{personnel, key, retain}

{condition, economic, financial}

A failure to implement effectively and efficiently our plan to remediate deficiencies in our internal controls and procedures could result in accounting errors and in violations of our settlement agreement with the SEC and our non-prosecution agreement with the Eastern District. We have experienced material weaknesses in our internal controls in the past. If we fail to maintain an effective system of internal controls, we may not be able to provide timely and accurate financial statements. This could cause investors to lose confidence in our reported financial results and have a negative effect on the trading price of our securities. Risks related to our business We depend upon the development of new products and enhancements to our existing products. If we fail to predict and respond to emerging technological trends and our customers changing needs or if we are unable to reduce our manufacturing costs over time as anticipated, we may not be able to remain competitive. Our business, operating results and growth rates may be adversely affected by unfavorable economic and market conditions, as well as the volatile geopolitical environment. We have made strategic acquisitions and entered into alliances and joint ventures in the past and intend to do so in the future. If we are unable to find suitable acquisitions or partners or to achieve expected benefits from such acquisitions or partnerships, there could be a material adverse effect on our business, growth rates and results of operations. The acquisition of Matrics may not produce the revenue, earnings, business synergies or technological advances that we anticipate. This could have an adverse effect on our competitive position, revenues and prospects for growth. The enterprise mobility industry is highly competitive, and competitive pressures from existing and new companies may have a materially adverse effect on our business, revenues, growth rates and market share. We are subject to risks related to our operations outside the United States. Unpredictable foreign sales and manufacturing environments may have a materially adverse effect on our business, financial condition and revenues. Our sales and manufacturing activities in foreign countries may be subject to lengthy receivables collection periods. A significant increase in our uncollected receivables may have a material adverse effect on our earnings and financial condition. We may face trade barriers that could have a material adverse effect on our results of operations and result in a loss of customers or suppliers. Fluctuations in the exchange rate of the U.S. dollar and other foreign currencies could have a material adverse effect on our results of operations and financial condition, including our sales and margins. We rely on our manufacturing facility in Reynosa, Mexico to manufacture a significant portion of our products. Any problems at the Reynosa facility could have a material adverse effect on our business, costs of revenue and financial condition. Some components, subassemblies and products are purchased from a single supplier or a limited number of suppliers. The loss of any of these suppliers may cause us to incur additional set-up costs, result in delays in manufacturing and delivering our products or cause us to carry excess or obsolete inventory. We outsource the manufacturing of many of our components and products, and if third-party manufacturers lack sufficient quality control or if there are significant changes in the financial or business condition of such third-party manufacturers, our ability to supply quality products to our customers may be disrupted. Management of our inventory will be complex as we continue to sell a significant mix of products through distributors. Fluctuations in distributor demand may cause us to reduce our prices and write down inventory, which could result in lower gross margins. We sell a majority of our products through resellers, distributors and original equipment manufacturers ( OEMs ). If the third-party distribution sources on which we rely do not perform their services adequately or efficiently or if they exit the industry, and we are not able to quickly find adequate replacements, there could be a material adverse effect on our revenue. If we are unable to protect our intellectual property rights or if third parties assert we are in violation of their intellectual property rights, there could be a material adverse effect on our results of operations and our ability to attract new customers and retain current customers. New safety regulations or changes in existing safety regulations related to our products may result in unanticipated costs or liabilities, which could have a materially adverse effect on our business, results of operations and future sales and could place additional burdens on the operations of our business. Compliance with environmental matters and worker health and safety laws could be costly and noncompliance with these laws could have a material adverse effect on our results of operations, expenses and financial condition. If we are unable to recruit and retain key employees, this could affect our ability to successfully grow our business.

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278352--3/3/2006--SYMBOL_TECHNOLOGIES_INC