Nokia 2011 Annual Report Download - page 96

Strategically, we want to be the preferred ecosystem partner for operators. By creating a new global
mobile ecosystem with Microsoft and focusing on driving operator data plan adoption in lower price
points with our feature phone offering, we believe we will be able to create a greater balance for
operators and provide attractive opportunities to share the economic benefits from services and
applications sales compared to other competing ecosystems, thereby improving our long-standing
relationships with operators around the world.
Speed of Innovation, Product Development and Execution
As the mobile communications industry continues to undergo significant changes, we believe that
speed of innovation and product development are important drivers of competitive strength. For
example, a number of our competitors have been able to successfully leverage their software expertise
to continuously bring innovations to market at a pace faster than typical hardware cycles. This has
placed increasing pressure on all industry participants to continue to shorten product creation cycles
and to execute in a timely, effective and consistent manner.
In February 2011, we announced our new strategy, including changes to our operational structure,
company leadership, decision-making, ways of working and competencies designed to accelerate our
speed of execution in an intensely competitive environment. The changes to our ways of working fall
into six categories: globally accountable business units; a revised services mission; local
empowerment; simplified decision-making; a performance-based culture with consistent behavior; and
a new leadership structure with new leadership principles. We believe under the new operational
structure and with these new ways of working we can deliver noticeable improvements to our speed of
innovation, product development and execution of both our Smart Devices and Mobile Phones
business units.
More Active Licensing Strategies of Patents and Intellectual Property
Success in our industry requires significant research and development investments, with intellectual
property rights filed to protect those investments and related inventions. In recent years, we have seen
new entrants in the industry as new ecosystems have lowered the barriers to entry. In 2011, we saw
intensified and more active licensing and enforcement strategies of patents and intellectual property
emerge through a series of legal disputes between several industry participants as patent holders
sought to protect their intellectual property against infringements by new entrants. It is not only
traditional industry participants that have sought to safeguard their intellectual property;
non-manufacturing patent licensing entities owning relevant technology patents have also actively
been enforcing their patents against new entrants. These companies’ sole business model is to buy
patents from the innovators and to maximize the value from those patents. As a result, the industry’s
focus on patents and intellectual property has increased significantly and patent portfolios have
become increasingly valuable for industry participants. Increased activity has also created lucrative
opportunities to monetize patents by selling them to others. We expect this trend to continue in 2012.
We believe we are well-positioned to both protect our existing business as well as generate
incremental value to our shareholders through our industry-leading patent portfolio.
We are a world leader in the development of mobile devices and mobile communications technologies,
which is also demonstrated by our strong patent position. During the last two decades, we have
invested more than EUR 45 billion in research and development and built one of the mobile device
industry’s strongest and broadest intellectual property right portfolios, with over 10 000 patent families.
In 2011, we continued to work hard to enforce our patents against unlawful infringement and realize
the value of our intellectual property. Our 2011 initiatives included, among other things, the signing of a
patent license agreement with Apple, which we expect will have a positive financial impact on our
future business, as well as capitalizing on strong market conditions by divesting several hundred patent
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