Nokia 2009 Annual Report Download - page 20

result of actual or perceived errors or defects in the map database. In addition, the business
customers may require us to correct defective data, which can be costly, or pay penalties if quality
requirements or service level agreements are not satisfied.
Our mobile devices and related accessories are also subject to counterfeiting activities in certain
markets. Counterfeit products may erode our brand due to poor quality. Such activities may affect us
disproportionately due to our leading market position in mobile devices. Furthermore, our products
and services are increasingly used together with hardware, software or service components that have
been developed by third parties, whether or not we have authorized their use with our products and
services. However, such components, such as batteries or software applications and content, may not
be compatible with our products and services and may not meet our and our customers’ and
consumers’ quality, safety, security or other standards. Additionally, certain components or layers that
may be used with our products may enable our products and services to be used for objectionable
purposes, such as to transfer content that might be illegal, hateful or derogatory. The use of our
products and services and their combinations with incompatible or otherwise substandard hardware,
software or software components, or for purposes that are inappropriate, is largely outside of our
control and could harm the Nokia brand.
Although we endeavor to develop products and services that meet the appropriate security standards,
such as data protection, we or our products and services and their combinations may be subject to
hacking, viruses, worms and other malicious software, unauthorized modifications or illegal activities
that may cause potential security risks and other harm to us, our customers or consumers and other
endusers of our products and services. This may affect us disproportionately due to our leading
market position in mobile devices, many of which feature industry leading thirdparty software,
solutions and services, as hackers tend to focus their efforts on the most popular products and
services. Due to the very high volumes of many of our mobile devices, such events or mere
allegations of such events may have a material adverse effect on our business.
In connection with providing our products and services and their combinations to our customers and
consumers, in particular with converged mobile devices, certain customer feedback, information on
consumer usage patterns and other personal and consumer data is collected and stored through our
products and services and their combinations either by the consumers or by us. Loss, improper
disclosure or leakage of any personal or consumer data collected by us, made available to us or stored
in or through our products and services could result in liability to us and harm our reputation and
brand. In addition, governmental authorities may use our products or services and their combinations
to access the personal data of individuals without our involvement, for example, through socalled
lawful intercept capability of network infrastructure. Even perceptions that our products and services
and their combinations do not adequately protect personal or consumer data collected by us, made
available to us or stored in or through our products and services or that they are being used by third
parties to access personal or consumer data could impair our sales or our reputation and brand value.
We are a global company and have sales in most countries of the world and, consequently,
our sales and profitability are dependent on the development of the mobile and fixed
communications industry in numerous diverse markets, as well as on general economic
conditions globally and regionally.
Our sales and profitability depend materially on the development of the mobile and fixed
communications industry in numerous diverse markets in terms of the number of new mobile
subscribers and the number of existing subscribers who upgrade or replace their existing mobile
devices and the growth of the investments made by mobile network operators and service providers.
In certain low penetration markets, in order to support a continued increase in mobile subscribers,
we continue to be dependent on our own and mobile network operators’ and distributors’ ability to
increase the sales volumes of lower cost mobile devices and on mobile network operators to offer
affordable tariffs and tailored mobile network solutions designed for a low total cost of ownership. In
highly penetrated markets, we are more dependent on our own and mobile network operators’
18