TeleNav 2011 Annual Report Download - page 27

Table of Contents
Nav N Go, as well as other competitors such as Google, Microsoft and TCS. Certain of the on
-board solutions that we offer may not satisfy
automotive manufacturers’ or end customers’ expectations for those solutions. To the extent that we charge service fees beyond an initial fee at
the time the vehicle is purchased, we may not be successful in gaining traction with customers to provide services and charge ongoing fees
outside of the traditional on-board navigation service model.
As we have limited experience in the on-board navigation market, we also may not price our solutions in such a way that is profitable for
us and enables us to recoup the development expenses we incurred to provide such solutions in the time we expect or at all. Development
schedules for automotive navigation products are difficult to predict, and there can be no assurance that we will achieve timely delivery of these
products to our customers. Furthermore, we are actively pursuing and have yet to be successful with connected automotive navigation solutions,
but believe this will be an important market. If we fail to achieve profitability in any of our automotive navigation solutions (whether on-board,
connected or other), we may be unable to achieve the benefits of revenue diversification.
We will also be dependent on our automobile manufacturer or OEM customer to report on vehicles sold and to remit fees due at the time of
sale. If our automobile manufacturer or OEM customers do not report promptly or correctly, our revenue, cost of revenue and net income may be
affected.
The success of our automotive navigation products may be affected by overall automotive industry dynamics and customer issues.
Our ability to succeed long term in the automotive industry depends on our ability to enter into contracts for future year vehicles with our
current automobile manufacturers in addition to broadening out to other automobile manufacturers and OEMs. For automobile manufacturers
with whom we have established relationships such as Ford, our success depends on continued production of vehicles with and adoption by
automobile buyers of our products offered by such automobile manufacturers. As we move forward, Ford may not include our solutions in future
year vehicles or territories, which would negatively affect our revenue from these products.
We may also not be successful in attracting and retaining other automobile manufacturers and OEMs due to intense competitive pressures
affecting vehicle sales on a global basis, the economic restructuring among certain domestic automobile manufacturers and OEMs and severe
financial-related shocks upon the automotive markets and supply chain.
If our end users increase their usage of our services, our net operating income may decline because the fees we receive from our wireless
carrier customers generally do not depend on usage.
With limited exceptions, our wireless carrier customers pay us fees that do not vary depending on whether or how often an end user uses
our services. Historically, end users using certain mobile phones or under certain service plans tended to use our services more than other end
users. We budget and operate our services by making certain assumptions about usage patterns. If our end users were to further increase their
usage of our services substantially or were to be permitted to use basic versions of our service for a fee, we would incur additional expenses to
expand our server capacity, operate additional data centers and pay additional third party content fees. These additional costs would harm our
operating results and financial condition.
We may not be able to enhance our LBS to keep pace with technological and market developments, or develop new LBS in a timely manner
or at competitive prices.
The market for LBS is emerging and is characterized by rapid technological change, evolving industry standards, frequent new product
introductions and short product life cycles. To keep pace with technological developments, satisfy increasing customer requirements and achieve
product acceptance, our future success depends upon our ability to enhance our current LBS platform and to continue to develop and introduce
new LBS
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