Nokia 2007 Annual Report Download - page 41

software or service components that have been developed by third parties, as Nokia enters new
businesses, and as the complexity of technology increases, the possibility of alleged infringement and
related intellectual property claims against us continues to rise. As new features are added to our
products, services and solutions, we are also agreeing upon licensing terms with a number of new
companies in the field of new evolving technologies. We believe companies like Nokia with a strong
IPR position, cumulative knowhow and IPR expertise can have a competitive advantage in the
converging industry, and in the increasingly competitive marketplace.
In many aspects, the business models for mobile services have not yet been established. The lack of
availability of licenses for copyrighted content, delayed negotiations, or restrictive copyright licensing
terms may have a material adverse effect on the cost or timing of content related services by us,
mobile network operators or thirdparty service providers, and may also indirectly affect the sales of
our mobile devices.
From time to time we are subject to patent infringement claims from third parties. We believe that,
based on industry practice and applicable legal obligations, any necessary licenses or rights under
patents that we may require can be agreed upon on terms that would not have a material adverse
effect on our business, results of operations or financial condition. Nevertheless, in some situations,
necessary licenses may not be available on acceptable commercial terms, if at all. The inability to
obtain necessary licenses on agreed upon terms or other rights, or the need to engage in litigation,
could have a material adverse effect on our business, results of operations and financial condition.
See “Item 3.D Risk Factors—We must develop or otherwise acquire complex, evolving technologies to
use in our business. If we fail to develop or otherwise acquire these complex technologies as required
by the market, with full rights needed to use in our business, or to protect them, or to successfully
commercialize such technologies as new advanced products, services and solutions that meet
customer demand, or fail to do so on a timely basis, this may have a material adverse effect on our
business and results of operations.” See also “Item 3.D Risk Factors—Our products, services and
solutions include increasingly complex technologies some of which have been developed by us or
licensed to us by certain third parties. As a consequence, evaluating the rights related to the
technologies we use or intend to use is more and more challenging, and we expect increasingly to
face claims that we have infringed third parties’ intellectual property rights. The use of these
technologies may also result in increased licensing costs for us, restrictions on our ability to use
certain technologies in our products, services and solution offerings, and/or costly and time
consuming litigation, which could have a material adverse effect on our business and results of
operations” and “Item 3.D Risk Factors—Our products, services and solutions include numerous new
Nokia and Nokia Siemens Networks patented, standardized, or proprietary technologies on which we
depend. Third parties may use without a license or unlawfully infringe our intellectual property or
commence actions seeking to establish the invalidity of the intellectual property rights of these
technologies. This may have a material adverse effect on our business and results of operations.”
Competition—Devices
Mobile device market participants compete with each other mainly on the basis of the breadth and
depth of their product and services portfolio, design, price, operational and manufacturing efficiency,
technical performance, distribution, quality, customer support and brand.
The competition in the market for our products, services and solutions continues to be intense from
both our traditional competitors in the mobile device industry, as well as from a number of new
competitors. Some of our competitors have used, and we expect will continue to use, more
aggressive pricing strategies, different design approaches and alternative technologies. In addition,
some competitors have chosen to focus on building products based on commercially available
components, which may enable them to introduce these products faster and with lower levels of
research and development expenditures than Nokia.
Historically, our principal competitors in mobile devices have been other mobile device manufacturers
such as LG, Motorola, Samsung and Sony Ericsson. In addition, mobile network operators are
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