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Updating IoT device firmware involves several risks that can impact device performance and operability.

One significant risk is that some firmware may not be compatible with multiple hardware versions. IoT devices often come in different iterations, and firmware designed for one version might not function properly on another. This incompatibility can lead to bricking the device, rendering it inoperative.

Loss of connectivity during the update process is another risk. If an IoT device relies on a network connection to download the firmware update, and that connection is lost during the process, it may result in a partially installed firmware. This can lead to performance issues or even complete failure of the device to operate.

Power loss during the update operation is also a critical concern. If the device loses power while the firmware is being written to memory, it could result in corrupted firmware. This can cause the device to fail to boot up, creating significant downtime and requiring recovery procedures to restore normal function.

Given these substantial risks—compatibility issues, loss of connectivity, and power loss—it is correct to conclude that all these factors contribute to the challenges associated with updating IoT device firmware. This comprehensive understanding underscores the importance of careful planning and execution when it comes to firmware updates in IoT applications.