Avid 2000 Annual Report Download - page 29

22
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
Some of the statements in this Form 10-K relating to our future performance, constitute forward-looking
statements. Such forward-looking statements are based upon management's current expectations and involve known and
unknown risks. Realization of any of these risks may cause actual results to differ materially from the results described in
the forward-looking statements. Certain of these risks are as follows:
Our future success will depend in part upon our ability to enhance our existing products in the digital editing
market.
Our core digital video and film editing market predominantly uses Avid products, particularly Media Composer,
which represents a significant portion of our revenues, and future growth in this market could be limited. Our future growth
will depend upon our ability to introduce new features and functionality for Media Composer, improve upon its
price/performance, respond to competitive offerings, and adapt to new industry requirements and standards. Any delay or
failure to further develop Media Composer or to introduce other new products in this market, could harm our business and
reduce our operating results.
Broadcast market is large, widely dispersed, and highly competitive, and we may not be successful in growing our
customer base in this market.
We are currently building our presence in the broadcast market and have augmented our NewsCutter offering with
the Unity for News products, launched in December 2000, and with the server, newsroom, and browser products obtained in
the recent Pluto and iNews acquisitions. As a relatively new player in the broadcast market, we may encounter difficulties
in establishing ourselves and developing a strong, loyal customer base. Our competitors, such as Associated Press, Sony,
Panasonic, and Grass Valley, may devote greater resources to the broadcast market than we do, or may be able to leverage
their market presence more effectively. If we are unsuccessful in capturing a share of the market, our business and revenues
could be adversely affected.
Competition in the 3D animation market has increased dramatically since our acquisition of Softimage.
The animation market has changed significantly from the time when we acquired our Softimage subsidiary in
August 1998. While Softimage once dominated the higher end of the 3D market (i.e., feature films and other intensive
graphics applications), it now faces new challenges to its products and services. Competitors' products, including
Alias/Wavefront's Maya, Discreet's 3D Studio Max, and NewTech's Lightwave, have reduced Softimage's market share. In
addition, new product offerings from all of the market players in recent years have contributed to downward price pressure,
which has resulted in increasing compression of margins. To the extent that these factors continue or worsen, our business
may suffer.
We have a significant share of the professional audio market and therefore growth in this market could be limited.
Currently, our Digidesign division maintains a significant portion of the professional audio market. Our future
success will depend in part upon our ability to offer, on a timely and cost-effective basis, new audio products and
enhancements of our existing audio products. The timely development of new or enhanced products is a complex and
uncertain process, and we may experience design, manufacturing, marketing, and other difficulties that delay or prevent our
development, introduction or marketing of new products or enhancements.
We are expanding our product line, and our future revenues depend on their success.
We are expanding our product line beyond our core video editing market to address the digital media production
needs of the broadcast news market, including cable and Internet news, on-line film and video finishing market, and the
emerging market for multimedia production tools, including the Internet and corporate markets. We have limited
experience in serving these markets, and there can be no assurance that we will be able to develop such products
successfully. To be successful, we will need to introduce new products, gain customer acceptance, and establish appropriate
distribution and support channels. Any unexpected delays or additional costs that we incur in achieving these goals could
harm our business and reduce our operating results.
Our future growth depends in part on the widespread adoption of the Internet by the digital media market.