Nokia 2009 Annual Report Download - page 16

relevant technologies and positively and timely differentiates us from our competitors. Our past
performance in the traditional mobile device market does not guarantee our success in the converged
mobile device market. In particular, our competitive advantages in the traditional mobile device
market are alone not sufficient for success in the converged mobile device market. Additionally, we
believe that our success in the converged mobile device market will be driven by, among other
factors, our ability to achieve in a timely manner the following priorities:
• improve our converged mobile device user experience, which will depend on how well we
integrate the hardware, software and services elements in a seamless, reliable and stable
manner; how intuitive the user interface is for consumers, including how easy it is for them to
discover and use our applications and content; and how well we develop and manage the
appropriate technological infrastructure to support a rich user experience;
• develop and scale up our services offering by expanding geographically, in particular in
partnership with more operators;
• become an attractive longterm partner for application developers, content providers and
industryleading technology providers seeking access to mobile consumers, which will depend
on whether we can provide the necessary technologies, including software platforms and
software developer tools, that they prefer and that are compatible with other relevant
technologies;
• create profitable business models where our converged mobile devices, particularly the
services sold with them, are preferred by consumers to less expensive or free alternatives,
either sold by us independently or in cooperation with operators;
• position the Nokia brand as representing the same high quality and desirability in converged
mobile devices as in traditional mobile devices; and
• optimize our competitive strengths in the traditional mobile device market in the development
of our converged mobile device business.
To address these priorities we have made, and are continuing to make, significant changes to the
way we do business. We may, however, have less experience, technological and innovative skill in
this market segment compared with our established traditional mobile device market segment, or we
may fail to reach adequate scale and profitability or fail to generate additional revenue through
business models customary in the businesses converging with the mobile communications business
such as online advertising. Our success in the converged mobile device market also depends on the
acceptance by the market, including our mobile network operator customers, of our expanding
services and on the network operators’ strategies regarding their own offering of services. If we are
not successful in achieving our converged mobile device priorities and their desired outcomes in a
timely manner, our business will become increasingly focused and dependent on the traditional
mobile device market. If that occurs, and if the current trends in that market continue, this could have
a material adverse effect on our business, results of operations, particularly our profitability, and
financial condition.
Our converged mobile device business has required and continues to require significant investment to
innovate and grow successfully. Such investments may include research and development, licensing
arrangements, acquiring businesses and technologies, recruiting specialized expertise and partnering
with third parties. Those investments may not, however, result in technologies, products and services
and their combinations that achieve or retain broad or timely market acceptance or are preferred by
application developers, content providers and, ultimately, our customers and consumers. We have
also made, and may make in the future, such investments through strategic acquisitions to acquire
key technologies, content and expertise to enhance the competitiveness of our converged mobile
devices. We may, however, fail to successfully complete business acquisitions or integrate the
acquired businesses or retain and motivate their key employees; identifiable intangible asset
amortization and the acquisition of businesses that may carry higher earnings multiples than Nokia
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