Nokia 2012 Annual Report Download - page 34

Our operations rely on the efficient and uninterrupted operation of complex and centralized
information technology systems and networks. If a system or network inefficiency, malfunction
or disruption occurs, this could have a material adverse effect on our business and results of
operations.
Our operations rely on the efficient and uninterrupted operation of complex and centralized information
technology systems and networks, which are integrated with those of third parties. All information
technology systems are potentially vulnerable to damage, malfunction or interruption from a variety of
sources. We are increasingly relying on third parties for the provision of information technology
systems and networks; for instance in early 2013, we announced plans to streamline our IT
organization including the transfer of certain activities and employees to HCL Technologies and
TATA Consultancy Services. We may experience disruptions if our partners do not deliver as we have
planned or if we are unable to successfully and smoothly implement the plans to streamline our IT
organization.
We pursue various measures in order to manage our risks related to system and network malfunction
and disruptions, including the use of multiple suppliers and available information technology security.
However, despite precautions taken by us, any malfunction or disruption of our current or future
systems or networks such as an outage in a telecommunications network used by any of our
information technology systems, or a breach of our cybersecurity, such as a malicious attack, malware
or other event that leads to an unanticipated interruption or malfunction of our information technology
systems or networks or data leakages, could have a material adverse effect on our brand image,
business and results of operations. In addition, if we fail to successfully use our information technology
systems and networks, our operational efficiency or competitiveness could be impaired which could
have a material adverse effect on our business and results of operations. A disruption, for instance in
our mail, music or location-based services, could cause significant discontent among users of our
products resulting in claims or deterioration of our brand image.
Any cybersecurity breach or other factors leading to an actual or alleged loss, improper
disclosure or leakage of any personal or consumer data collected by us or our partners or
subcontractors, made available to us or stored in or through our products could have a
material adverse effect on our sales, results of operations, reputation and value of the Nokia
brand.
Although we endeavor to develop products that meet the appropriate security standards, including with
respect to data protection, we or our products and online services, marketing and developer sites may
be subject to breaches in our cybersecurity, including hacking, viruses, worms and other malicious
software, unauthorized modifications or illegal activities, that may cause potential security risks and
other harm to us, our customers or consumers and other end-users of our products. Cybersecurity
concerns may affect us disproportionately due to our brand recognition in mobile products. Due to the
very high volumes of many of our mobile products, and the evolving nature of services and map data,
such events or mere allegations of such events may have a material adverse effect on our business.
Additionally, we contract with multiple third parties in various jurisdictions who collect and use certain
data on our behalf, for instance for marketing purposes. Although we have processes in place
designed to ensure appropriate collection, handling and use of such data, third parties may use the
data inappropriately, breach laws in collecting, handling or using such data or leak such data. This
could lead to lengthy proceedings or fines imposed on us as well as adverse effects to our reputation
and brand value.
In connection with providing our products to our customers and consumers, certain customer feedback,
information on consumer usage patterns and other personal and consumer data is collected and stored
through our products, in particular with smartphones, either by the consumers or by us or our partners
or subcontractors. Our developer sites may also require certain data to be provided by the developers.
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