TeleNav 2011 Annual Report Download - page 28

Table of Contents
offerings and enhanced performance features and functionality on a timely basis at competitive prices. Our inability, for technological or other
reasons, to enhance, develop, introduce or deliver compelling LBS in a timely manner, or at all, in response to changing market conditions,
technologies or consumer expectations could have a material adverse effect on our operating results or could result in our LBS becoming
obsolete. Our ability to compete successfully will depend in large measure on our ability to maintain a technically skilled development and
engineering team and to adapt to technological changes and advances in the industry, including providing for the continued compatibility of our
LBS platform with evolving industry standards and protocols and competitive network operating environments.
Development and delivery schedules for LBS are difficult to predict. We have in the past and may in the future fail to deliver new versions
of our services in a timely fashion. If new releases of our LBS are delayed or our services are not preloaded on mobile phones upon their initial
commercial release, our wireless carrier customers may curtail their efforts to market and promote our LBS and end users may switch to
competing services, any of which would result in a delay or loss of revenue and could harm our business. In addition, we cannot assure you that
the technologies and related LBS that we develop will be brought to market by our wireless carrier customers as quickly as anticipated or that
they will achieve broad acceptance among wireless carriers or consumers.
We rely on third party data and content to provide our services and if we were unable to obtain content at reasonable prices, or at all, our
gross margins and our ability to provide our services would be harmed.
We rely on third party data and content to provide our services, including map data, POI, traffic information, gas prices and weather
information. If our suppliers of this data or content were to enter into exclusive relationships with other providers of LBS or were to discontinue
providing such information and we were unable to replace them cost effectively, or at all, our ability to provide our services would be harmed.
Our gross margins may also be affected if the cost of third party data and content increases substantially.
We obtain map data from TomTom Maps and NAVTEQ, which are companies owned by our current and potential competitors TomTom
Maps and Nokia, respectively. Accordingly, these third party data and content providers may act in a manner that is not in our best interest. For
example, they may cease to offer their map data to us.
We may not be able to upgrade our LBS platform to support certain advanced features and functionality without obtaining technology
licenses from third parties. Obtaining these licenses may be costly and may delay the introduction of such features and functionality, and these
licenses may not be available on commercially favorable terms, or at all. The inability to offer advanced features or functionality, or a delay in
our ability to upgrade our LBS platform, may adversely affect consumer demand for our LBS and, consequently, harm our business.
We have experienced rapid growth in recent periods. If we fail to manage our growth effectively, our financial performance may suffer.
We have substantially expanded our overall business, end user base, headcount and operations in recent periods. We increased our total
number of full time employees from 438 at June 30, 2008 to 1,011 at June 30, 2011. During this same period, we made substantial investments
in our information systems and significantly expanded our operations outside the United States, including an expansion of our research and
development activities in China. Our expansion has placed, and our expected future growth will continue to place, a significant strain on our
managerial, administrative, operational, financial and other resources. If we are unable to manage our growth successfully, our operating results
will suffer. In addition, due to the large number of employees located outside of the United States, we have exposure to changes in foreign
currency rates which could result in higher labor and related operating costs.
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