Polaris 2010 Annual Report Download - page 35

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If we are unable to continue to enhance existing products and develop and market new products that
respond to customer needs and preferences and achieve market acceptance, we may experience a decrease
in demand for our products, and our business could suffer.
One of our growth strategies is to develop innovative, customer-valued products to generate revenue growth.
Our sales from new products in the past have represented a significant component of our sales and are expected to
continue to represent a significant component of our future sales. We may not be able to compete as effectively with
our competitors, and ultimately satisfy the needs and preferences of our customers, unless we can continue to
enhance existing products and develop new innovative products in the global markets in which we compete. Product
development requires significant financial, technological, and other resources. While we expended $84.9 million,
$63.0 million and $77.5 million for research and development in 2010, 2009 and 2008, respectively, there can be no
assurance that this level of investment in research and development will be sufficient to maintain our competitive
advantage in product innovation which could cause our business to suffer. Product improvements and new product
introductions also require significant planning, design, development, and testing at the technological, product, and
manufacturing process levels and we may not be able to timely develop product improvements or new products. Our
competitors’ new products may beat our products to market, be more effective with more features and/or less
expensive than our products, obtain better market acceptance, or render our products obsolete. Any new products
that we develop may not receive market acceptance or otherwise generate any meaningful sales or profits for us
relative to our expectations based on, among other things, existing and anticipated investments in manufacturing
capacity and commitments to fund advertising, marketing, promotional programs, and research and development.
Item 1B. Unresolved Staff Comments
Not Applicable.
20