Nokia 2006 Annual Report Download - page 25

An unfavorable outcome of litigation could materially impact our business, financial condition
or results of operations.
We are a party to lawsuits in the normal course of our business. Litigation can be expensive, lengthy
and disruptive to normal business operations. Moreover, the results of complex legal proceedings are
difficult to predict. An unfavorable resolution of a particular lawsuit could have a material adverse
effect on our business, operating results, or financial condition.
If we are unable to recruit, retain and develop appropriately skilled employees, our ability to
implement our strategies may be hampered and, consequently, our results of operations may
be materially harmed.
We must continue to recruit, retain and through constant competence training develop appropriately
skilled employees with a comprehensive understanding of our businesses and technologies. As
competition for skilled personnel remains keen, we seek to create a corporate culture that
encourages creativity and continuous learning. We are also continuously developing our
compensation and benefits policies and taking other measures to attract and motivate skilled
personnel. Nevertheless, we have encountered in the past, and may encounter in the future,
shortages of appropriately skilled personnel, which may hamper our ability to implement our
strategies and materially harm our results of operations.
Changes in various types of regulation in countries around the world could have a material
adverse effect on our business.
Our business is subject to direct and indirect regulation in each of the countries in which we, the
companies with which we work or our customers do business. As a result, changes in various types
of regulations applicable to current or new technologies, products or services could affect our
business adversely. For example, it is in our interest that the Federal Communications Commission
maintains a regulatory environment that ensures the continued growth of the wireless sector in the
United States. In addition, changes in regulation affecting the construction of base stations and
other network infrastructure could adversely affect the timing and costs of new network construction
or expansion and the commercial launch and ultimate commercial success of these networks.
Moreover, the implementation of new technological or legal requirements, such as the requirement
in the United States that all handsets must be able to indicate their physical location, could impact
our products and solutions, manufacturing or distribution processes, and could affect the timing of
product and solution introductions, the cost of our production, products or solutions as well as their
commercial success. Finally, export control, tariffs or other fees or levies imposed on our products,
environmental, product safety and security and other regulations that adversely affect the export,
import, pricing or costs of our products and solutions, as well as new services related to our
products, could adversely affect our net sales and results of operations.
The impact of these changes in regulation could affect our business adversely even though the
specific regulations do not always directly apply to us or our products and solutions.
See ‘‘Item 4.B Business Overview—Government Regulation’’ for a more detailed discussion about the
impact of various regulations.
ITEM 4. INFORMATION ON THE COMPANY
4.A History and Development of the Company
Nokia is the world’s largest manufacturer of mobile devices and a leader in mobile networks. Nokia
offers consumers a wide range of mobile devices, and increasingly we are providing consumers with
experiences in music, navigation, video, TV, imaging, games and business mobility through these
devices. Nokia also provides equipment, solutions and services for network operators, service
providers and corporations.
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