NVIDIA 2012 Annual Report Download - page 15

Table of Contents
Our ability to successfully develop and deliver new products will depend on various factors, including our ability to:
• effectively identify and capitalize upon opportunities in new markets;
• timely complete and introduce new products and technologies;
• transition our semiconductor products to increasingly smaller line width geometries; and
• obtain sufficient foundry capacity and packaging materials.
We occasionally have experienced delays in completing the development and introduction of new products and product enhancements, and we could
experience delays in the future. In addition, in the past, we have been unable to successfully manage product transitions from older to newer products resulting
in obsolete inventory. Our failure to successfully develop and introduce new products and technologies or identify new uses for existing or future products,
could result in rapidly declining average selling prices, reduced demand for our products or loss of market share any of which could harm our competitive
position and cause our revenue, gross margin and overall financial results to suffer.
If we are unable to achieve market acceptance and design wins for our products and technologies, our results of operations and competitive position
will be harmed.
The success of our business depends to a significant extent on our ability to achieve market acceptance of our new products and enhancements to our
existing products and identify and enter new markets. The market for our product and technologies has been characterized by unpredictable and sometimes
rapid shifts in the popularity of products, often caused by the publication of competitive industry benchmark results, changes in pricing of dynamic random-
access memory devices and other changes in the total system cost of add-in boards, as well as by severe price competition and by frequent new technology
and product introductions. Broad market acceptance is difficult to achieve and such market acceptance, if achieved, is difficult to sustain due to intense
competition and frequent new technology and product introductions. If we do not successfully achieve or maintain market acceptance for our products and
enhancements or identify and enter new markets, our ability to compete and maintain or increase revenues will suffer.
Additionally, there can be no assurance that the industry will continue to demand new products with improved standards, features or performance. If our
customers, original equipment manufacturers, or OEMs, original design manufacturers, or ODMs, add-in-card and motherboard manufacturers, system
builders and consumer electronics companies, do not continue to design products that require more advanced or efficient processors and/or the market does
not continue to demand new products with increased performance, features, functionality or standards, sales of our products could decline and the markets for
our products could shrink. Decreased sales of our products for these markets could negatively impact our revenue and our financial results.
We believe achieving design wins, which entails having our existing and future products chosen for hardware components or subassemblies designed by
OEMs, ODMs, and add-in board, or AIB, and motherboard manufacturers is an integral part of our future success. Our OEM, ODM, and AIB and
motherboard manufacturers' customers typically introduce new system configurations as often as twice per year, typically based on spring and fall design
cycles or in connection with trade shows. Accordingly, when our customers are making their design decisions, our existing products must have competitive
performance levels or we must timely introduce new products in order to be included in our customers' new system configurations. This requires that we:
• anticipate the features and functionality that customers and consumers will demand;
• incorporate those features and functionalities into products that meet the exacting design requirements of our customers;
• price our products competitively; and
• introduce products to the market within our customers' limited design cycles.
If OEMs, ODMs and AIB and motherboard manufacturers do not include our products in their systems, they will typically not use our products in their
systems until at least the next design configuration. Therefore, we endeavor to develop close relationships with our OEMs and ODMs, in an attempt to better
anticipate and address customer needs in new products so that we will achieve design wins.
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