10. IF WE FAIL TO ESTABLISH AND MAINTAIN RELATIONSHIPS WITH KEY PARTICIPANTS IN
OUR TARGET MARKETS, WE MAY HAVE DIFFICULTY SELLING OUR PRODUCTS.
In addition to our customers, we will
need to establish and maintain relationships with companies that develop
technologies that work in conjunction with our microprocessors. These
technologies include operating systems, BIOS software, graphics chips, DRAMs and
other hardware components and software that are used in computers. If we fail to
establish and maintain these relationships, it would be more difficult for us to
develop and market products with features that address emerging market trends.
11. IF OUR PRODUCTS ARE NOT COMPATIBLE WITH THE OTHER COMPONENTS THAT OUR
CUSTOMERS DESIGN INTO THEIR SYSTEMS, SALES OF OUR PRODUCTS COULD BE DELAYED OR
CANCELLED AND A SUBSTANTIAL PORTION OF OUR PRODUCTS COULD BE RETURNED.
Our products are designed to function as components of a
system. We anticipate that our customers will use our products in systems that
have differing specifications and that require various other components, such as
dynamic random access memory, or DRAM, and other semiconductor devices. If our
customers' systems are to function properly, all of the components must be
compatible with each other. If our customers experience system-level
incompatibilities between our products and the other components in their
systems, we could be required to modify our products to overcome the defects or
delay shipment of our products until the manufacturers of other components
modify their products or until our customers select other components. These
events would delay purchases of our products, cause orders for our products to
be cancelled or result in product returns. System level incompatibilities that
are significant, or are perceived to be significant, could also result in
negative publicity and could significantly damage our business.
12. IF OUR CUSTOMERS ARE NOT ABLE TO OBTAIN THE OTHER COMPONENTS NECESSARY TO
BUILD THEIR SYSTEMS, SALES OF OUR PRODUCTS COULD BE DELAYED OR CANCELLED.
Suppliers of other components incorporated into our
customers' systems may experience shortages, which could affect the demand for
our products. For example, from time to time, the semiconductor industry has
experienced shortages of some materials and devices, including DRAM. Our
customers could be forced to defer or cancel purchases of our products if they
are not able to obtain the other components necessary to build their systems.
13. THERE MAY BE SOFTWARE APPLICATIONS THAT ARE NOT COMPATIBLE WITH OUR PRODUCTS,
WHICH MAY HARM OUR REPUTATION, PREVENT OUR PRODUCTS FROM ACHIEVING MARKET
ACCEPTANCE AND IMPAIR OUR REVENUE GROWTH.
Software applications with
machine-specific routines programmed into them can result in specific
incompatibilities. If a particular software application is programmed in a
manner that makes it unable to respond correctly to our microprocessor, it will
appear to users of that software that our microprocessor is not x86 compatible.
We have encountered specific incompatibilities in the past and expect to do so
in the future, which could harm our reputation. In addition, if customers
perceive that our products are not sufficiently x86 compatible, our products may
never achieve market acceptance and our revenue growth would be impaired.
14. IF WE FAIL TO MANAGE OUR GROWTH EFFECTIVELY, OUR
BUSINESS MAY NOT SUCCEED.
Our ability to implement our business plan in a
rapidly evolving market requires an effective planning and management process.
We have recently increased our number of employees substantially and plan to
increase the scope of our operations and the size of our direct sales force
domestically and internationally. This growth will require us to continue to
expand our facilities. In addition, this growth may place a significant strain
on our management systems, infrastructure and other resources. We expect that we
will need to continue to improve our financial and managerial controls and
procedures. We will also need to expand, train and manage our workforce
worldwide. Furthermore, we expect that we will be required to manage an
increasing number of relationships with customers and other third parties. Our
failure to manage our growth effectively would harm our business.