Performance Technologies (PTIX)

Competition

For its SEGway Signaling products, the Company focuses its engineering on products that use Internet Protocol (IP) to carry signaling traffic. The Company’s SEGway Signaling products currently compete with products from Alcatel-Lucent, Nortel, Tekelec, Hewlett Packard, Cisco Systems, Huawei, Ericsson, and Adax Incorporated.

Embedded purpose-built computer systems are either based on proprietary technology or are based on open standards. The Company’s IPnexus systems products are standards-based, which is the smaller portion of this market. A key differentiating factor of the Company’s IPnexus systems products is the Company’s internally developed NexusWare Carrier Grade Linux operating system and software development environment. We believe this is a key competitive advantage in our marketplace because many of the Company’s competitors provide third party operating systems with their products.

The OEM communications equipment market is characterized by rapid technological change and frequent introduction of products based on new technologies. Competitive factors in this market include price, product performance, functionality, product quality and reliability, customer service and support, marketing capability, corporate reputation and brand recognition, and changes in relative price/performance ratios. The Company’s IPnexus systems products compete in certain standards-based markets, specifically AdvancedMC/µTCA and CompactPCI 2.16.

Competitors providing some level of systems offerings include Emerson Network, Radisys, GE Fanuc, Continuous Computing and Kontron. Management believes that its capability to deliver fully integrated, system level solutions with NexusWare is a key differentiating factor for its products.

We cannot guarantee that we will be able to compete successfully with our existing or new competitors or that the competitive pressures faced by us will not have a material adverse effect on our revenue and operating results.

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Competition

For its SEGway Signaling products, the Company focuses its engineering on products that use Internet Protocol (IP) to carry signaling traffic. The Company’s SEGway Signaling products currently compete with products from Alcatel-Lucent, Nortel, Tekelec, Hewlett Packard, Cisco Systems, Huawei, Ericsson, and Adax Incorporated.

Embedded purpose-built computer systems are either based on proprietary technology or are based on open standards. The Company’s IPnexus systems products are standards-based, which is the smaller portion of this market. A key differentiating factor of the Company’s IPnexus systems products is the Company’s internally developed NexusWare Carrier Grade Linux operating system and software development environment. We believe this is a key competitive advantage in our marketplace because many of the Company’s competitors provide third party operating systems with their products.

The OEM communications equipment market is characterized by rapid technological change and frequent introduction of products based on new technologies. Competitive factors in this market include price, product performance, functionality, product quality and reliability, customer service and support, marketing capability, corporate reputation and brand recognition, and changes in relative price/performance ratios. The Company’s IPnexus systems products compete in certain standards-based markets, specifically AdvancedMC/µTCA and CompactPCI 2.16.

Competitors providing some level of systems offerings include Emerson Network, Radisys, GE Fanuc, Continuous Computing and Kontron. Management believes that its capability to deliver fully integrated, system level solutions with NexusWare is a key differentiating factor for its products.

We cannot guarantee that we will be able to compete successfully with our existing or new competitors or that the competitive pressures faced by us will not have a material adverse effect on our revenue and operating results.

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Competition

Embedded, purpose-built computer systems are either based on proprietary technology or are based on open standards. The Company’s products are standards-based, which is the smaller portion of this market. NexusWare, the central element of our entire software offering, is a key point of differentiation for our products in the embedded platform marketplace.

The OEM communications equipment market is characterized by rapid technological change and frequent introduction of products based on new technologies. Competitive factors in this market include price, product performance, functionality, product quality and reliability, customer service and support, marketing capability, corporate reputation and brand recognition, and changes in relative price/performance ratios. The Company’s Embedded Systems products compete in certain standards-based markets, specifically CompactPCI 2.16, AdvancedMC/µTCA, PCI and PCI Express.

Competitors are generally split into two categories, the full system suppliers and component suppliers.

Full system suppliers – Competitors for the Company’s Advanced Managed Platforms include Emerson Network Power (which acquired Motorola ECC in 2007), Radisys, Continuous Computing and Kontron. Management believes that its capability to deliver fully integrated, system level platform solutions, with NexusWare is a key differentiating factor for its products.

Component suppliers – Competitors for the Company’s embedded component elements include Emerson Network Power (which acquired Motorola ECC and Artesyn Technologies in 2006), Kontron, Adax Incorporated and Interphase Corporation.

For its SEGway Signaling products, the Company focuses its engineering on products that use Internet Protocol (IP) to carry signaling traffic. The Company’s signaling products currently compete with products from Alcatel-Lucent, Nortel, Tekelec, Hewlett Packard, Cisco Systems, Adax Incorporated and Ulticom.

9

Competition

Embedded, purpose-built computer systems are either based on proprietary technology or are based on open standards. The Company’s products are standards-based, which is the smaller portion of this market. NexusWare, the central element of our entire software offering, is a key point of differentiation for our products in the embedded platform marketplace.

The OEM communications equipment market is characterized by rapid technological change and frequent introduction of products based on new technologies. Competitive factors in this market include price, product performance, functionality, product quality and reliability, customer service and support, marketing capability, corporate reputation and brand recognition, and changes in relative price/performance ratios. The Company’s Embedded Systems products compete in certain standards-based markets, specifically CompactPCI 2.16, AdvancedMC/µTCA, PCI and PCI Express.

Competitors are generally split into two categories, the full system suppliers and component suppliers.

Full system suppliers – Competitors for the Company’s Advanced Managed Platforms include Emerson Network Power (which acquired Motorola ECC in 2007), Radisys, Continuous Computing and Kontron. Management believes that its capability to deliver fully integrated, system level platform solutions, with NexusWare is a key differentiating factor for its products.

Component suppliers – Competitors for the Company’s embedded component elements include Emerson Network Power (which acquired Motorola ECC and Artesyn Technologies in 2006), Kontron, Adax Incorporated and Interphase Corporation.

For its SEGway Signaling products, the Company focuses its engineering on products that use Internet Protocol (IP) to carry signaling traffic. The Company’s signaling products currently compete with products from Alcatel-Lucent, Nortel, Tekelec, Hewlett Packard, Cisco Systems, Adax Incorporated and Ulticom.

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