This might be the reason?
"In the MPEG-2 encoder market IBM is the principal competitor in the
broadcast communications market, while Sony is the most potent
competitor
in the consumer market. C-Cube expects that other companies will
introduce
competing encoder products in the future.* Although the timing of the
production availability of such encoders is uncertain, their
availability
could have an adverse impact on C-Cube's encoder product revenues and
margins. C-Cube may also face increased competition in the future from
new
entrants into its markets. In particular, as the markets for C-Cube's
products develop, competition from large semiconductor companies, such
as
SGS-Thomson, Texas Instruments and Phillips, and from vertically
integrated
companies such as Sony, MEC, Toshiba and NEC, may increase
significantly.
If C-Cube can offer low-cost hardware solutions, then it may continue to
compete with providers of software solutions such as National and AMD,
and
manufacturers of CPUs such as Intel and Motorola. The ability of C-Cube
to
compete successfully in the rapidly evolving markets for high
performance
video compression technology depends on factors both within and outside
of
its control, including success in designing and subcontracting the
manufacture of new products that implement new technologies, adequate
sources of raw materials, protection of Company products by effective
utilization of intellectual property laws, product quality, reliability,
price and the efficiency of production, the pace at which customers
incorporate C-Cube's integrated circuits into their products or
technologies, success of competitors' products and general economic
conditions. There can be no assurance that C-Cube will be able to
compete
successfully in the future." |
