TeleNav 2010 Annual Report Download - page 33

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Wireless communications have experienced a variety of outages and other delays as a result of infrastructure
and equipment failures and could face outages and delays in the future. These outages and delays could affect our
ability to provide our LBS successfully. In addition, changes by a wireless carrier to network infrastructure may
interfere with the integration of our servers with their network and delivery of our LBS and may cause end users
to lose functionality for services they have already purchased. Any of the foregoing could harm our business,
operating results and financial condition.
We cannot control the quality standards of our wireless carrier partners, their mobile phone providers and
other technology partners. We cannot guarantee that the mobile phones are free from errors or defects. If errors
or defects occur in mobile phones or services offered by our wireless carrier partners, it could result in consumers
terminating our services, damage to our reputation, increased customer service and support costs, 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 wireless carrier partners and adversely affect our business.
The wireless communications industry continues to experience consolidation and an increased formation of
alliances among wireless carriers and between wireless carriers and other entities. Should one of our wireless
carrier partners consolidate or enter into an alliance with another carrier, this could have a material adverse
impact on our business. For example, our wireless carrier partner Alltel was acquired by Verizon in early 2009.
Although we had an agreement with Alltel to be the exclusive white label provider of navigation services,
Verizon elected to discontinue selling mobile phones preloaded with our LBS. We have experienced a decline in
our revenue from the combined entity as a result of this decision, and expect this decline to continue. Such a
consolidation or alliance may cause us to lose a wireless carrier partner or require us to reduce prices as a result
of enhanced customer leverage, which would have a negative effect on our business. We may not be able to
expand our base of wireless carrier partners to offset revenue declines if we lose a wireless carrier partner or if
the number of end users for our services declines.
In addition, if two or more of our competitors or wireless carrier partners were to merge or partner, the
change in the competitive landscape could adversely affect our ability to compete effectively. Our competitors
may also establish or strengthen cooperative relationships with their wireless carrier partners, sales channel
partners or other parties with whom we have strategic relationships, thereby limiting our ability to promote our
LBS. These events could reduce our revenue and adversely affect our operating results.
Reduced expenditures for mobile phones or wireless services due to adverse or uncertain economic conditions
may negatively affect our business and results of operations.
Recent adverse economic conditions and future uncertainties may directly affect the marketing and
distribution of mobile phones and our LBS by our wireless carrier partners. As current and future conditions in
the domestic and global economies remain uncertain, it is difficult to estimate the level of economic growth,
which may cause some wireless carriers to emphasize marketing basic voice services rather than data services,
such as LBS. In addition, subscribers may try to reduce their monthly expenses by reducing spending on
discretionary wireless services, such as ours. Accordingly, the future direction of the overall domestic and global
economies will have an impact on our overall performance. Economic conditions are beyond our control. If these
economic conditions worsen or fail to improve, we may experience reduced demand for and pricing pressure on
our LBS, which could harm our operating results.
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