Nokia 2012 Annual Report Download - page 17

over the entire spectrum we address through our Mobile Phones business unit from very low cost voice
centric devices to devices that can be categorized as smartphones. Smartphones of other
manufacturers, particularly Android-based smartphones, are reaching lower price points, which is
increasingly reducing the addressable market and lowering the price points for feature phones and
competing with the higher-end devices from our Mobile Phones portfolio.
Accordingly, we need to produce devices for our Mobile Phones portfolio in a timely and cost-efficient
manner with differentiated user experience, hardware, software, localized services and applications
that attract new users and connect new and existing users to an affordable Internet and application
experience. If we are unable to produce competitive devices at various price points for our Mobile
Phones portfolio, our business, results of operation and financial condition could be materially and
adversely affected. The success of our Mobile Phones business unit is subject to certain risks and
uncertainties, including the following:
• We may not be able to leverage our traditional competitive strengths of scale in manufacturing
and logistics, as well as in our marketing and sales channels for instance, to increase the
speed to market in a sufficiently cost-competitive manner, particularly with mobile operators
and consumers requiring increasing customization to meet divergent local needs and
preferences.
• The market we address with the more affordable devices from our Mobile Phones business
unit may further reduce in size if the higher-end price points become dominated by more
affordable smartphones, such as Android-based smartphones, and the higher-end devices
from our Mobile Phones business unit are not sufficiently competitive compared to those.
• The features of higher-end devices from our Mobile Phones business unit may not be
sufficiently competitive compared to more affordable smartphones, such as Android-based
smartphones.
• Our estimates of the growth potential in the markets we address through our Mobile Phones
business unit may not be accurate and as such result in misplaced investments of resources.
• In some regions, overall market demand for feature phones may decline further.
• Speed of shifts in market development and demand, for example, related to 2G, 3G and 4G
mobile communication technology transitions and requirements, may be faster than we have
anticipated, making our Mobile Phones portfolio less competitive if we are unable to timely
develop and produce devices addressing such shifts.
• We are using our internally developed platforms for our devices from the Mobile Phones
business unit, which may hinder our ability or increase our costs in integrating hardware and
sourcing components and other parts due to limitations in the platform and vendors tooling
their supply and configurations for devices that operate on other platforms.
• If the platforms that we use for our devices from the Mobile Phones business unit are not
sufficiently competitive or otherwise optimal for our devices, developing the platform or
switching to another platform may be time-consuming and costly, and there are no
guarantees that our competitive position would benefit from such actions or that the
development costs would result in a positive return on our investments. If the attractiveness of
the platforms we use in the Mobile Phones business unit deteriorates, corrective actions will
consume time and resources from us and may not lead to desired results, and may expose
our Mobile Phones business unit to a significant deterioration in competiveness.
• The platforms that we use for our devices from our Mobile Phones business unit may not be
sufficiently attractive, flexible and cost efficient for application developers and other partners
to create a vibrant ecosystem for devices with increasingly smartphone-like features, such as
Internet access and applications.
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