Nokia 2012 Annual Report Download - page 23

customers to incorporate map data from sources other than our HERE business or reduce the demand
for fee-based products and services which incorporate HERE map database. Accordingly, our
HERE business must positively differentiate its digital map data and related location-based content
from similar offerings by our competitors and create competitive business models for our customers.
Our failure to keep momentum and increase our speed of innovation, product development and
execution will impair our ability to bring new innovative and competitive mobile products and
location-based or other services to the market in a timely manner.
We need to identify and understand the key market trends and user segments to address consumers’
expanding needs in order to bring new innovative and competitive mobile products and location-based
or other services to market in a timely manner. We must follow, anticipate and be able to respond with
speed to these key market trends, and actively create future trends in the market, through our product
development processes. We also need to execute efficiently in creating and developing competitive
products, and in bringing our products to market in a timely manner with compelling marketing
messages that succeed in retaining and engaging our current, and attracting new, customers and
consumers.
We have made changes to our strategy in recent years including the introduction of a sharpened
strategy and further rebalancing measures in 2012. This sharpened strategy included among other
things reductions within certain research and development projects, consolidation of certain
manufacturing operations, focusing of marketing and sales activities, including prioritizing key markets,
streamlining certain functions, and planned reductions related to non-core assets. We may face
adverse effects due to these measures: for instance, we may reduce marketing spend which may lead
to less demand for our products or we may exit certain markets which may result in lower net sales.
The operational changes in our focused strategy may lead to further dominance by competitors such
as Samsung and Apple as well as other competitors.
Our inability to innovate, develop and bring our mobile products and location-based or other services to
market and delays in the ramp up of new product deliveries may result from a variety of factors,
including failure to anticipate consumer trends and needs; insufficient and ineffective internal and
external execution in our research and product development processes; an inability to secure
necessary components or software assets from suppliers in sufficient quantities on a timely basis; or
an inability to improve our time to market, including the introduction of innovations, through execution
challenges in relation to our shift of most of our mobile device assembly to our manufacturing facilities
in Asia where a majority of our suppliers are located. Additionally, the software complexity and
integration of the hardware and software functionalities may cause unforeseen delays even close to
the anticipated launch of the mobile product. We continue to be dependent on component providers,
contract manufacturers, application developers and other partners, which can lead to additional
challenges and delays that are largely outside of our control.
We operate in a fast paced and innovative industry. Our business may require significant investment to
innovate and grow successfully. Such investments may include research and development, licensing
arrangements, acquiring businesses and technologies, recruiting specialized expertise and partnering
with third parties. Those investments may not, however, result in technologies, products or services
that achieve or retain broad or timely market acceptance or are preferred by application developers,
our customers and consumers. We have also made, and may make in the future, such investments
through acquisitions. We may, however, fail to successfully complete planned acquisitions or integrate
the acquired businesses or assets or retain and motivate their key employees.
Our ability to innovate and the need to increase the speed of our product development and execution are
critical to the success of our current strategies and in bringing products and location-based or other
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