948708--3/2/2010--SMITH_MICRO_SOFTWARE

related topics

{product, market, service}

{customer, product, revenue}

{personnel, key, retain}

{property, intellectual, protect}

{stock, price, operating}

{condition, economic, financial}

{debt, indebtedness, cash}

{acquisition, growth, future}

{system, service, information}

{competitive, industry, competition}

{regulation, government, change}

Our operating results may be adversely impacted by the current worldwide economic slowdown and uncertainties in the marketplace. Our quarterly revenues and operating results are difficult to predict and could fall below analyst or investor expectations, which could cause the price of our common stock to fall. Our total revenues currently depend on a small number of products and customers, so our operating results are vulnerable to unexpected shifts in demand. Competition within our target markets is intense and includes numerous established competitors, which could negatively affect our revenues and results of operations. Acquisitions of companies or technologies may disrupt our business and divert management attention and cause our current operations to suffer. We have recently entered new, emerging markets in which we have limited experience; if these markets do not develop or we are unable to otherwise succeed in them, our revenues will suffer and the price of our common stock will likely decline. If the adoption of and investments in new technologies and services grows more slowly than anticipated in our product planning and development, our operating results, financial condition and prospects may be negatively affected. Our growth depends in part on our customers ability and willingness to promote services and attract and retain new customers or achieve other goals outside of our control. Our gross margins may continue to change due to shifts in our sales mix. Our products may contain undetected software defects, which could negatively affect our revenues. Technology and customer needs change rapidly in our market, which could render our products obsolete and negatively affect our business, financial condition and results of operations. Regulations affecting our customers and us and future regulations, to which they or we may become subject to, may harm our business. We may be unable to adequately protect our intellectual property and other proprietary rights, which could negatively impact our revenues. If we are unable to retain key personnel, the loss of their services could materially and adversely affect our business, financial condition and results of operations. If we fail to continue to establish and maintain strategic relationships with mobile device manufacturers, market acceptance of our products and our profitability, may suffer. We may raise additional capital through the issuance of additional equity or convertible debt securities or by borrowing money, in order to meet our capital needs. Additional funds may not be available on terms acceptable to us to allow us to meet our capital needs.

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948708--3/2/2010--SMITH_MICRO_SOFTWARE_INC