896841--3/1/2007--AVID_TECHNOLOGY

related topics

{customer, product, revenue}

{system, service, information}

{stock, price, operating}

{property, intellectual, protect}

{product, market, service}

{regulation, change, law}

{operation, natural, condition}

{operation, international, foreign}

{competitive, industry, competition}

{personnel, key, retain}

{acquisition, growth, future}

{cost, regulation, environmental}

Our revenues and operating results depend on several variables and may fluctuate from period to period. We may have difficulty accurately forecasting quarterly revenues and operating results. The markets in which we operate are highly competitive, and our competitors may be able to draw upon a greater depth and breadth of resources than those which are available to us. Our success depends in part on our ability to adapt to dynamic market demand and continued customer acceptance of our products. Recent and potential future acquisitions could be difficult to integrate, divert the attention of key personnel, disrupt our business, dilute stockholder value and impair our financial results. Our Professional Video customers are increasingly demanding comprehensive product and service solutions from single vendors, which we may be unable to provide or successfully implement. To the extent we derive significant revenues from consumer markets, we may experience lower profit margins and greater revenue seasonality. Our products may, from time to time, experience quality problems that could negatively impact our customer relationships, our market reputation and our operating results. Competition for technical and management personnel is intense in our industry, and our business may suffer if we are unable to attract or retain key personnel. A catastrophic event may significantly limit our ability to conduct business as normal. Our success depends in part on protecting our proprietary technology from third-party infringement and misappropriation. Our products may infringe third-party intellectual property rights. Qualifying and supporting our products on multiple computer platforms is time consuming and expensive. Our use of independent contracting firms and subcontractors for certain product development and manufacturing activities may limit our control over such activities or expose us to other risks. Our revenues and operating results depend significantly on third-party reseller and distribution channels. We depend on the availability and proper functioning of certain third-party technology that we incorporate into or bundle with our products. Lengthy procurement lead times and unpredictable life cycles and customer demand for some of our products may result in significant inventory risks. We purchase certain hardware components for our products from sole source suppliers. Our international operations expose us to significant exchange rate fluctuations and regulatory, intellectual property and other risks that may adversely affect our operating results. We are subject to risks associated with environmental regulatory compliance. Changes in accounting rules could adversely affect our future operating results. Our websites may subject us to legal claims that could harm our business. If we experience problems with our third-party leasing program, our revenues may be adversely impacted. The market price of our common stock has been and may continue to be volatile.

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896841--3/1/2007--AVID_TECHNOLOGY_INC