TeleNav 2010 Annual Report Download - page 29

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• changes in interest rates and our mix of investments, which would impact our return on our investments
in cash and marketable securities;
• changes in our effective tax rates; and
• the impact of new accounting pronouncements.
Fluctuations in our quarterly operating results might lead analysts to change their models for valuing our
common stock. As a result, our stock price could decline rapidly and we could face costly securities class action
suits or other unanticipated issues.
If a substantial number of end users change mobile phones or if our wireless carrier partners switch to
subscription plans that require active monthly renewal by end users, our revenue could suffer.
Subscription fees represent the vast majority of our revenue. As mobile phone development continues and
new mobile phones are offered at subsidized rates to subscribers in connection with plan renewals, an increasing
percentage of end users who already subscribe to our services will likely upgrade from their existing mobile
phones. With some wireless carriers, subscribers are unable to automatically transfer their existing subscriptions
from one mobile phone to another.
In addition, wireless carriers may switch to subscription billing systems that require subscribers to actively
renew, or opt-in, each month from current systems that passively renew unless subscribers take some action to
opt-out of their subscriptions. In either case, unless we or our wireless carrier partners are able to resell
subscriptions to these subscribers or replace these subscribers with other subscribers, our revenue would suffer
and this could harm our business, operating results and financial condition.
If we are unable to attract new wireless carrier partners, our revenue growth may be adversely affected and
our net income could decline.
If we do not add new wireless carrier partners and increase the number of end users who receive our
services through those new wireless carrier partners, we may not be able to increase our revenue in the longer
term. Our sales and marketing efforts may not be successful in establishing relationships with new wireless
carrier partners. We will not be successful in expanding into new geographic markets without developing
relationships with successful wireless carriers in those markets. We expect to incur significant additional
expenses in hiring additional personnel and expanding our international operations in order to attract new
wireless carrier partners in different geographic markets to achieve revenue growth. If we fail to attract new
successful wireless carrier partners and their subscribers or our new service introductions are not successful, we
may be unable to increase our revenue and our operating results may be adversely affected.
Our lengthy sales cycle makes it difficult for us to predict when we will generate revenue from new wireless
carrier partners.
We have a lengthy and complex sales process. The integration and testing of our LBS platform with a
prospective wireless carrier requires substantial time and expense before launching our LBS with that wireless
carrier. In new geographic markets, our sales cycles are typically longer and may involve more challenges such
as language or government regulation/compliance requirements. Even after a wireless carrier decides to launch
our LBS, the integration of our LBS platform with a wireless carrier’s network and billing systems generally
requires several months to complete. Moreover, launch of our LBS by a wireless carrier typically will be timed to
coincide with a new mobile phone launch, over which we have no control. Because of this lengthy cycle, we may
experience delays from the time we begin the sales process and incur increased costs and expenses to obtain a
new wireless carrier as a customer and integrate our LBS platform until the time we generate revenue from such
wireless carrier. These delays may make it difficult to predict when we will generate revenue from new wireless
carrier partners.
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