Nokia 2012 Annual Report Download - page 15

• The frequency of Windows Phone operating system updates may be too slow and the
platform may be too closed to address changing market and customer requirements in a
timely manner, which may erode customer support and consumer attractiveness of the
platform.
• Emergence of new alternative ecosystems and platforms could make the Windows Phone
ecosystem less attractive to customers and consumers.
Our success in the smartphone market depends on our ability to introduce and bring to market
quantities of attractive, competitively priced Nokia products with Windows Phone that are
positively differentiated from our competitors’ products, both outside and within the Windows
Phone ecosystem, and receive broad market acceptance.
Our strategy is to compete in the smartphone market with Nokia products with Windows Phone. Our
plans to further introduce and bring to market quantities of attractive, competitively priced Nokia
products with Windows Phone that receive broad market acceptance and are positively differentiated
from competitors’ products, both outside and within the Windows Phone ecosystem, are subject to
certain risks and uncertainties, which could, either individually or together, significantly impair our
ability to compete effectively in the smartphone market.
The principal risks and uncertainties in addition to the factors outlined in the above risk factor that could
undermine the competitive position of our Nokia products with Windows Phone include the following:
• Our strategy for Nokia products with Windows Phone may not enable us to achieve in a timely
manner the necessary scale, product breadth, geographical reach and localization to be
sufficiently competitive in the smartphone market.
• The Microsoft Windows Phone platform may not support the hardware configurations required
to succeed in becoming a sufficiently price competitive platform and may limit our ability to
develop a price competitive smartphone portfolio of products or bring certain hardware
capabilities at the higher price points.
• We may not be able to introduce a compelling portfolio of Nokia products with Windows
Phone that include new hardware and design innovations. Additionally, we may not be able to
introduce functionalities such as advanced imaging and sensor technology, location-based
services and entertainment or otherwise customize our Nokia products with Windows Phone
in order to positively differentiate our products from competitors’ products, both outside and
within the Windows Phone ecosystem.
• Consumers may not prefer the Windows Phone user experience, interface or software
functionality.
• We may face delays in bringing our Nokia products with Windows Phone to various markets
due to, for instance, manufacturing difficulties, delays in software and/or hardware
development or product or sales package customization to accommodate various markets or
operator requests.
• We may face issues in selecting, engaging or securing support from leading operators and
retailers for the initial launches and sales ramp-up of our Nokia products with Windows Phone
due to, for instance, inadequate sales incentives, lack of proper training of sales personnel,
insufficient marketing support and experience in generating interest for a still relatively
unfamiliar Windows Phone platform in an otherwise highly competitive market. Delayed or
non-optimal initial launches and sales ramp-up could result in diminished support from leading
operators and retailers and low consumer interest for subsequent launches of our Nokia
products with Windows Phone and may also adversely affect our Nokia brand generally and
sales of our other Nokia mobile products.
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