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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony,

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To: sommovigo who wrote (61027)10/20/2000 3:44:18 PM
From: StockDung  Read Replies (3) of 122087
 
HAND does not even make PDAs, they subcontract everything from the Prospectus S-1/A
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We depend on third-party manufacturers to produce sufficient volume of our
handheld devices, modules and accessories in a timely fashion and at
satisfactory quality levels. The cost, quality and availability of third-party
manufacturing operations are essential to the successful production and sale of
our products. We have a manufacturing agreement with Flextronics under which we
order products on a purchase order basis in accordance with a forecast. In
addition, in April 2000, we qualified a second manufacturer of our products,
Solectron. We expect Solectron's Guadalajara, Mexico facility to be operational
by the end of summer 2000. The absence of dedicated capacity under our
manufacturing agreements means that, with little or no notice, our manufacturers
could refuse to continue to manufacture all or some of the units of our devices
that we require or change the terms under which they manufacture our devices. If
they were to stop manufacturing our devices, it could take up to six months to
qualify an alternative manufacturer to replace the lost manufacturing capacity
and our results of operations could be harmed. In addition, if our manufacturers
were to change the terms under which they manufacture for us, our manufacturing
costs could increase and our results of operations could suffer.

Our reliance on third-party manufacturers exposes us to the following risks
outside our control:

- unexpected increases in manufacturing and repair costs;

- interruptions in shipments if one of our manufacturers is unable to
complete production;

- inability to control quality of finished products;

- inability to control delivery schedules;

- unpredictability of manufacturing yields; and

- potential lack of adequate capacity to fill all or a part of the services
we require.
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