Autodesk 2002 Annual Report Download - page 30

software market in particular is fairly mature and characterized by vigorous competition in each of the vertical
markets in which we compete, both by entry of competitors with innovative technologies and by consolidation of
companies with complementary products and technologies. In addition, some of our competitors have greater
financial, technical, sales and marketing and other resources. Furthermore, the availability of third-party
application software is a competitive factor within the computer-aided design market. Because of these and other
factors, competitive conditions in the industry are likely to intensify in the future. Increased competition could
result in price reductions, reduced net revenues and profit margins and loss of market share, any of which would
likely harm our business.
We believe that our future results depend largely upon our ability to offer new products, and to continue to
provide existing product offerings, that compete favorably with respect to reliability, performance, ease of use,
range of useful features, continuing product enhancements, reputation, price and training.
Because we derive a substantial portion of our net revenues from a limited number of products, if these
products are not successful, our net revenues will be adversely affected.
We derive a substantial portion of our net revenues from sales of AutoCAD software, AutoCAD upgrades,
and products that are interoperable with AutoCAD. As such, any factor adversely affecting sales of AutoCAD
and AutoCAD upgrades, including product life cycle, market acceptance, product performance and reliability,
reputation, price competition and the availability of third-party applications, would likely harm our operating
results.
Net revenues or earnings shortfalls or the volatility of the market generally may cause the market price of our
stock to decline, which could harm our business.
The market price for our common stock has experienced significant fluctuations and may continue to
fluctuate significantly. The market price for our common stock may be affected by a number of factors, including
the following: net revenues or earnings shortfalls and changes in estimates or recommendations by securities
analysts; the announcement of new products or product enhancements by us or our competitors; quarterly
variations in our or our competitors’ results of operations; developments in our industry; and general market
conditions and other factors, including factors unrelated to our operating performance or the operating
performance of our competitors.
In addition, stock prices for many companies in the technology sector have experienced wide fluctuations
that have often been unrelated to the operating performance of such companies. After periods of volatility in the
market price of a particular company’s securities, securities class action litigation has often been brought against
that company. This type of litigation is often expensive and diverts management’s attention and resources, which
could adversely affect our financial condition or results of operations.
Our efforts to develop and introduce new products and service offerings expose us to risks such as costs
related to product defects and large expenditures that may not result in additional net revenues.
Rapid technological change as well as changes in customer requirements and preferences characterize the
software industry. The software products we offer are complex, and despite extensive testing and quality control,
may contain errors or defects. These defects or errors could result in corrective releases to our software products,
damage to our reputation, loss of revenues, an increase in product returns or lack of market acceptance of our
products, any of which would likely harm our business.
Additionally, we are devoting significant resources to the development of technologies and service offerings
to address demands in the marketplace for increased connectivity and use of digital data created by computer-
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