Nokia 2004 Annual Report Download - page 18

We depend on our suppliers for the timely delivery of components and for their compliance
with our supplier requirements, such as, most notably, our and our customers’ product
quality, safety and other standards. Their failure to do so could adversely affect our ability to
deliver our products and solutions successfully and on time.
Our manufacturing operations depend to a certain extent on obtaining adequate supplies of fully
functional components on a timely basis. Our principal supply requirements are for electronic
components, mechanical components and software, which all have a wide range of applications in
our products. Electronic components include integrated circuits, microprocessors, standard
components, memory devices, cameras, displays, batteries and chargers while mechanical
components include covers, connectors, key mats and antennas. In addition, a particular
component may be available only from a limited number of suppliers. Suppliers may from time to
time extend lead times, limit supplies or increase prices due to capacity constraints or other
factors, which could adversely affect our ability to deliver our products and solutions on a timely
basis. Moreover, even if we attempt to select our suppliers and manage our supplier relationships
with scrutiny, a component supplier may fail to meet our supplier requirements, such as, most
notably, our and our customers’ product quality, safety and other standards, and consequently
some of our products are unacceptable to us and our customers, or we may fail in our own
quality controls. Moreover, a component supplier may experience delays or disruption to its
manufacturing, or financial difficulties. Any of these events could delay our successful delivery of
products and solutions, which meet our and our customers’ quality, safety and other
requirements, or otherwise adversely affect our sales and our results of operations. Also, our
reputation and brand value may be affected due to real or merely alleged failures in our products
and solutions.
We are developing a number of our new products and solutions together with other
companies. If any of these companies were to fail to perform, we may not be able to bring
our products and solutions to market successfully or in a timely way and this could have a
material adverse impact on our sales and profitability.
We continue to invite the providers of technology, components or software to work with us to
develop technologies or new products and solutions. These arrangements involve the commitment
by each company of various resources, including technology, research and development efforts,
and personnel. Although the target of these arrangements is a mutually beneficial outcome for
each party, our ability to introduce new products and solutions that meet our and our customers’
quality, safety and other standards successfully and on schedule could be hampered if, for
example, any of the following risks were to materialize: the arrangements with the companies
that work with us do not develop as expected, the technologies provided by the companies that
work with us are not sufficiently protected or infringe third parties’ intellectual property rights in
a way that we cannot foresee or prevent, the technologies, products or solutions supplied by the
companies that work with us do not meet the required quality, safety and other standards or
customer needs, our own quality controls fail, or the financial standing of the companies that
work with us deteriorates.
Our operations rely on complex and highly centralized information technology systems and
networks. If any system or network disruption occurs, this reliance could have a material
adverse impact on our operations, sales and operating results.
Our operations rely to a significant degree on the efficient and uninterrupted operation of complex
and highly centralized information technology systems and networks, which are integrated with
those of third parties. Any failure or disruption of our current or future systems or networks could
have a material adverse effect on our operations, sales and operating results. Furthermore, any
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