of the potential short-term effects of such disturbances. However, if these disturbances in the financial markets last for an extended period of time, or if alternative mitigating actions are not readily available at reasonable cost, there could be material adverse effects on the Company's results of operations and financial position.

RISK FACTORS ASSOCIATED WITH Y2K ISSUES

The Company has substantially completed its initial assessment of reasonably likely worst case scenarios of Non-IT Business Systems and/or IT Systems failures and related consequences. Based on current information, the Company believes the most likely worst case scenario is it will experience minor malfunctions and failures of its IT Systems and Non-IT Business Systems at the beginning of the Year 2000 not previously detected during the Company's inventory and risk assessment and remediation activities. The Company currently believes these malfunctions and failures will not have a material impact on its results of operations or financial condition. However, there can be no assurance the Y2K remediation by the Company or third parties will be properly and timely completed, and the failure to do so could have a material adverse effect on the Company, its business, its results of operations, and its financial condition.

In particular, the Company believes a lack of Y2K readiness by its significant third party vendors could cause material interruptions in the Company's operations. The identification of additional issues with respect to the Y2K compliance of key third parties could have a material adverse effect on the Company's results of operations. In addition, important factors that could cause results to differ materially include, but are not limited to, the ability of the Company to successfully identify systems and vendors that have a Y2K issue, the nature and amount of remediation effort required to fix the affected systems, the adequacy of such remediation efforts, the production-related contingency plans of competitors with the Company's third party suppliers, and the costs and availability of labor and resources to successfully address the Y2K issues and/or to execute on any required contingency plans.

FACTORS THAT MAY AFFECT FUTURE RESULTS AND FINANCIAL CONDITION

COMPETITION

The personal computer industry is highly competitive and is characterized by aggressive pricing practices, downward pressure on gross margins, frequent introduction of new products, short product life cycles, continual improvement in product price/performance characteristics, price sensitivity on the part of consumers, and a large number of competitors. The Company's results of operations and financial condition have been, and in the future may continue to be, adversely affected by industry wide pricing pressures and downward pressures on gross margins. The industry has also been characterized by rapid technological advances in software functionality, hardware performance, and features based on existing or emerging industry standards. Several competitors of the Company have either targeted or announced their intention to target certain of the Company's key market segments, including