TeleNav 2015 Annual Report Download - page 33

Table of Contents
warranty claims, lost revenue and diverted development resources, any of which could adversely affect our business, results of operations and
financial condition.
Mergers, consolidations or other strategic transactions in the wireless communications industry could weaken our competitive position,
reduce the number of our map providers and adversely affect our business.
The mapping data industry continues to experience consolidation. Should one of our map providers consolidate or enter into an alliance
with another navigation provider, this could have a material adverse impact on our business. Currently, two of our map suppliers are owned by
competitors in the navigation space. Nokia, which owns HERE, has recently agreed to sell HERE to a consortium of German automobile
manufacturers. Microsoft recently also sold some of its mapping assets to Uber, which may reduce competition among the remaining map
suppliers. Such a consolidation may cause us to lose a map supplier or require us to increase the royalties we pay to map vendors as a result of
enhanced supplier leverage, which would have a negative effect on our business. We may be unable to replace our map suppliers, were we to
lose a map supplier, and the remaining map supplier may increase license fees. In addition, as we continue to use more OSM-based maps and no
longer purchase maps from those suppliers, we may be unable to purchase other data that is integral to our navigation products from our existing
map suppliers.
Changes in business direction and market conditions could lead to charges related to structural reorganization and discontinuation of
certain products or services, which may adversely affect our financial results.
In response to changing market conditions and the desire to focus on new and more potentially attractive opportunities, we may be required
to strategically realign our resources and consider restructuring, eliminating, or otherwise exiting certain business activities. For example, in
April 2013, we sold our enterprise business to a third party, which resulted in a net gain to us but also required us to provide transition services
to the buyer. In the fourth quarters of fiscal 2013 and 2014, in order to better align and focus our resources we initiated restructuring plans
resulting in reductions of approximately 83 and 108 full-time positions, respectively, and restructuring charges of $1.5 million and $2.4 million,
respectively, related to severance and benefits for the positions eliminated. Any decision to reduce investment in, dispose of, or otherwise exit
business activities may result in the recording of special charges, such as workforce reduction and excessive facility space costs.
Risks related to our intellectual property and regulation
We operate in an industry with extensive intellectual property litigation. Claims of infringement against us, our customers, or other business
partners may cause our business, operating results and financial condition to suffer.
Our commercial success depends in part upon us, our partners and our customers not infringing intellectual property rights owned by others
and being able to resolve claims of intellectual property infringement without major financial expenditures and/or need to alter our technologies
or cease certain activities. We operate in an industry with extensive intellectual property litigation and it is not uncommon for our wireless
carrier customers, handset manufacturing partners, automobile manufacturers and OEMs and competitors to be involved in infringement lawsuits
by or against third parties. Many industry participants that own, or claim to own, intellectual property aggressively assert their rights, and our
customers and other business partners, who we agree in certain circumstances to indemnify for intellectual property infringement claims related
to our services, are often targets of such assertions. We cannot determine with certainty whether any existing or future third party intellectual
property rights would require us to alter our technologies, obtain licenses or cease certain activities.
We have received, and may in the future receive, claims from third parties alleging infringement and other related claims. As of the date of
this Annual Report on Form 10-K, we were named as a defendant in several cases alleging that our services infringe other parties' patents, as
well as other matters. See Part I, Item 3, “Legal Proceedings,” for a description of these matters. These cases and future litigation may make it
necessary to defend ourselves and our customers and other business partners by determining the scope, enforceability and validity of third party
proprietary rights or to establish our proprietary rights. Some of our competitors may have substantially greater resources than we do and may be
able to sustain the costs of complex intellectual property litigation to a greater degree and for longer periods of time than we could. In addition,
patent holding companies that focus solely on extracting royalties and settlements by enforcing patent rights may target us, our wireless carrier
customers or our other business partners. These companies typically have little or no product revenue and therefore our patents may provide little
or no deterrence against such companies filing patent infringement lawsuits against us. Regardless of whether claims that we are infringing
patents or other intellectual property rights have any merit, these claims are time consuming and costly to evaluate and defend and could:
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adversely affect our relationships with our current or future customers and other business partners;
• cause delays or stoppages in the shipment of Telenav enabled or preloaded mobile phones or vehicles, or cause us to modify or
suspend the provision of our navigation services;
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cause us to incur significant expenses in defending claims brought against our customers, other business partners or us;