Nokia 2011 Annual Report Download - page 44

• The costs, cash outflows and charges related to the implementation of the new strategy and
restructuring plan, including the planned personnel reductions, may be greater than currently
estimated.
• Nokia Siemens Networks cannot guarantee that it will achieve or sustain the targeted
benefits, which could result in further restructuring efforts. In addition, it cannot guarantee that
the benefits, even if achieved, will be adequate to meet its long-term growth and profitability
targets.
In addition, Nokia, Siemens and Nokia Siemens Networks have indicated that Nokia Siemens
Networks is to become a more independent entity. There can be no assurances of the success of such
intentions or the timing of such plans, nor can there be any assurance that the ownership of Nokia
Siemens Networks will, or will not, change in the future or any new shareholder will provide any
support to Nokia Siemens Networks.
Nokia Siemens Networks’ sales and profitability depend on its success in the mobile
broadband infrastructure services market, a key focus area in its new strategy. Nokia Siemens
Networks’ may fail to effectively and profitably adapt its business and operations in a timely
manner to the increasingly diverse service needs of its customers in that market.
A key component of Nokia Siemens Networks’ new strategy is the focus on the mobile broadband
infrastructure services market, which it believes will be a key driver of sales and profitability. Nokia
Siemens Networks’ success in the services market is dependent on a number of factors, including
adapting its policies and procedures to the additional emphasis on a services business model,
recruiting and retaining skilled personnel, its ability to successfully develop market recognition of its
business as a leading provider of software and service support in the mobile broadband infrastructure
industry, and an ability to maintain efficient and low cost operations. Delays in implementing initiatives,
further consolidation of Nokia Siemens Networks’ customers, increased competition and other factors
which Nokia Siemens Networks may not be able to anticipate may also affect its success in the
services market.
If Nokia Siemens Networks is not successful in implementing its services business strategy and achieving
the desired outcomes in a timely manner or if the mobile broadband services market fails to develop in
the manner currently anticipated by Nokia Siemens Networks, its business will be more dependent on the
traditional network systems product offering, which is increasingly characterized by equipment price
erosion, maturing industry technology, intense price competition and non-recurring sales. If that occurs,
and the current trends in the traditional network systems market continue, this could have a material
adverse effect on our business, results of operations, particularly profitability, and financial condition.
Competition in the mobile broadband infrastructure and related services market is intense.
Nokia Siemens Networks’ may be unable to maintain or improve its market position or respond
successfully to changes in the competitive environment.
The competitive environment in the mobile and fixed networks infrastructure and related services
market continues to be intense and is characterized by equipment price erosion, a maturing of industry
technology and intense price competition. Moreover, mobile network operators’ cost reductions are
reducing the amount of available business resulting in increased competition and pressure on pricing
and profitability. Overall, participants in this market compete with each other on the basis of product
offerings, technical capabilities, quality, service and price. Nokia Siemens Networks competes with
companies that have larger scale and higher margins affording such companies more flexibility on
pricing, while some competitors may have stronger customer finance possibilities due to internal
policies or governmental support, for example in the form of trade guarantees, allowing them to offer
products and services at very low prices or with attractive financing terms. Nokia Siemens Networks
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