Nokia 2010 Annual Report Download - page 92

has moderated. The moderation in seasonality has been caused by shifts in the regional makeup of
the overall market. Specifically, there has been a larger mix of industry volumes coming from markets
where the fourth quarter holiday seasonality is much less prevalent.
NAVTEQ’s sales to the automotive industry are not significantly impacted by seasonality. However,
NAVTEQ’s sales to navigation device and mobile handset manufacturers typically see strong fourth
quarter seasonality due to holiday sales. As the relative share of licensing of NAVTEQ’s digital map
data and related locationbased content and services for use in mobile devices compared to invehicle
navigation systems has increased during the last few years, NAVTEQ’s sales have been increasingly
affected by the same seasonality as mobile device sales.
Nokia Siemens Networks also experiences seasonality. Its sales are generally higher in the last quarter
of the year compared with the first quarter of the following year due to network operators’ planning,
budgeting and spending cycles.
Accounting Developments
The International Accounting Standards Board, or IASB, has and will continue to critically examine
current IFRS, with a view towards improving existing IFRS as well as increasing international
harmonization of accounting rules. This process of improvement and convergence of worldwide
accounting standards has resulted in amendments to existing rules effective from January 1, 2010 and
additional amendments effective the following year. These are discussed in more detail under “New
accounting pronouncements under IFRS” in Note 1 to our consolidated financial statements included
in Item 18 of this annual report. There were no IFRS accounting developments adopted in 2010 that
had a material impact on our results of operations or financial position.
Subsequent Events
Nokia outlines new strategy, introduces new leadership and operational structure
On February 11, 2011, we outlined our new strategic direction, including changes in leadership and
operational structure designed to accelerate the company’s speed of execution in the intensely
competitive mobile product market. The main elements of our new strategy includes: plans for a
broad strategic partnership with Microsoft to build a new global mobile ecosystem, with Windows
Phones serving as Nokia’s primary smartphone platform; a renewed approach to capture volume and
value growth to connect “the next billion” to the internet in developing growth markets; focused
investments in nextgeneration disruptive technologies; and a new leadership team and operational
structure designed to focus on speed, accountability and results.
We and Microsoft have entered into a nonbinding term sheet, however, the planned partnership with
Microsoft remains subject to negotiation and execution of definitive agreements by the parties, and
there can be no assurances that definite agreements will be entered into. The future impact to Nokia
Group’s financial statements resulting from the terms of any definitive agreements will be evaluated
once those terms are agreed.
As of April 1, 2011, we will have a new operational structure, which features two distinct business
units in Devices & Services business: Smart Devices and Mobile Phones. They will focus on our key
business areas: smartphones and massmarket mobile phones. Each unit will have profitandloss
responsibility and endtoend accountability for the full consumer experience, including product
development, product management and product marketing.
Starting April 1, 2011, we will present our financial information in line with the new organizational
structure and provide financial information for our three businesses: Devices & Services, NAVTEQ and
Nokia Siemens Networks. Devices & Services will include two business units: Smart Devices and Mobile
Phones as well as devices and services other and unallocated items. For IFRS financial reporting
purposes, we will have four operating and reportable segments: Smart Devices and Mobile Phones
within Devices & Services, NAVTEQ and Nokia Siemens Networks.
91