Incredimail 2009 Annual Report Download - page 30

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Competition
Our industry is subject to intense competition. Our products compete in the specialized market for email software products and services
that aim to offer a personalized and entertaining email experience for consumers. IncrediMail was among the first companies to offer to the
consumer email market a solution that combines an email product with an online gallery of creative content. Compiling content is a lengthy
process and we have been doing it since 1999. We consider ourselves a pioneer in this market and we believe that we have an “early mover”
advantage over many of our competitors. We believe that IncrediMail has one of the largest collections of creative and diverse graphics, sound
and multimedia content available online for email communications.
Our ability to compete effectively depends upon our ability to distinguish our Company and our products from our competitors and
their products, and includes the following factors:
Our main competitors among specialized providers of email services offer the following products: WikMail, Arcsoft Multimedia
Email™ 3 and Mind Spark Products™. In addition, our products also face competition from general email software programs offered to the
private market by large Internet and software companies, such as AOL9 by America Online, Inc., Eudora
®
by QUALCOMM Incorporated
(Nasdaq: QCOM), Thunderbird
®
by Mozilla Corporation and Outlook Express and Windows Live Messenger 2009 (WLM 2009) by Microsoft
Corporation (Nasdaq: MSFT), some of which may also incorporate certain special features that provide a personalized email experience, some of
them offering creative graphic backgrounds, such as Yahoo! Mail™. Many of the large Internet and software companies offer their email
software programs free of charge. Our Magentic and PhotoJoy products’
main competitors, in area of providers of wallpapers, screensaver and
digital photo management offer the following products: Picasa, webshots.com and screensavers.com, which offer wallpapers and screensavers
both free and premium products for a fee. Our HiYo product's main competitors, in the area of creative instant messenger tools, are SweetIM,
Bandoo, Imminent and SmileyCentral by IAC/InterActiveCorp. Competition with these products could result in a reduction of the number of
downloads, market share, prices and margins, fewer purchases of our products and services, and increased research and development costs as
well as marketing expenses.
Our products also compete in the market for web-
based email software products, such as Google's Gmail™, Yahoo! Mail™ and
Microsoft's Hotmail™. The web based email market is characterized with significant competition, changing technologies and evolving products
and services enhancements.
Google, Yahoo! and Microsoft are each offering a web-based e-
mail service in addition to the many other services they provide, such as
desktop search, local search, instant messaging, photos, maps, video sharing, mobile applications and so on. We expect these competitors to
increasingly use their financial and engineering resources to compete with our client-based e-
mail service, and if we are unable to successfully
compete with them, our results of operations may be adversely affected.
●
the creativity, variety and volume of content accessible through our software;
●
product quality;
●
product pricing;
●
success and timing of new product development and introductions;
●
quality of customer support;
●
maintaining our reputation for fighting spam and offering spyware
-
free products;
●
intellectual property protection; and
●
development of successful marketing channels.
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