Nokia 2012 Annual Report Download - page 42

unfavorable variations in its product and service mix towards lower margin products or services, this
could have a material adverse effect on our business, results of operations, particularly profitability,
and financial condition.
Nokia Siemens Networks’ strategy to focus on mobile broadband infrastructure and services is subject
to risks and uncertainties, including:
• Nokia Siemens Networks’ ability to adapt its policies and procedures to the additional
emphasis on a services business model.
• Nokia Siemens Networks’ ability to recruit and retain skilled personnel.
• Nokia Siemens Networks’ ability to successfully develop market recognition of its business as
a leading provider of software and service support in the mobile broadband infrastructure
industry.
• Nokia Siemens Networks’ ability to maintain efficient and low-cost operations.
• Delays in implementing relevant initiatives.
• Further consolidation of its customers.
• Increased competition.
• If Nokia Siemens Networks’ fails to implement its strategy successfully, its market share may
decline which could result in the loss of scale benefits and reduce competitiveness and its
financial performance may deteriorate.
• The market may develop in directions that leave Nokia Siemens Networks deficient in certain
technologies and industry areas that impact its overall competitiveness.
• Certain customers who currently buy services and products from Nokia Siemens Networks
that are not regarded as core may choose to turn to alternative vendors to maintain end-to-
end service from their suppliers.
• The development and implementation of Nokia Siemens Networks’ strategy has consumed
and will continue to consume significant time, attention and resources of its management.
Competition in the mobile broadband infrastructure and related services market is intense.
Nokia Siemens Networks’ may be unable to maintain or improve its market position or respond
successfully to changes in the competitive environment.
The competitive environment in the mobile broadband infrastructure and related services market
continues to be intense and is characterized by equipment price erosion, a maturing of industry
technology and intense price competition. Moreover, mobile operators’ cost reductions are reducing
the amount of available business resulting in increased competition and pressure on pricing and
profitability. Overall, participants in this market compete with each other on the basis of product
offerings, technical capabilities, quality, service and price.
Nokia Siemens Networks competes with companies that have larger scale and historically higher
margins affording such companies more flexibility on pricing, as well as companies that may have
stronger customer finance possibilities due to internal policies or governmental support, for example in
the form of trade guarantees, allowing them to offer products and services at very low prices or with
attractive financing terms. Nokia Siemens Networks also faces increasing competition from competitors
from China, which endeavor to gain market share for instance by leveraging their low-cost advantage
in tenders for customer contracts. Competition for new communication service provider customers as
well as for new infrastructure deployments is particularly intense and focused on price. In addition, new
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