Nokia 2012 Annual Report Download - page 90

create a greater balance for mobile operators and provide attractive opportunities to share the
economic benefits from services and applications sales compared to other competing ecosystems,
thereby improving our long-standing relationships with mobile operators around the world.
Speed of Innovation, Product Development and Execution
As the mobile communications industry continues to undergo significant changes, we believe that
speed of innovation and product development are important drivers of competitive strength. For
example, a number of our competitors have been able to successfully leverage their software expertise
to continuously bring innovations to market at a pace faster than typical hardware cycles. This has
placed increasing pressure on all industry participants to continue to shorten product creation cycles
and to execute in a timely, effective and consistent manner.
Active Monetization Strategies of Patents and Intellectual Property Rights, or IPR
Success in our industry requires significant research and development investments, with intellectual
property rights filed to protect those investments and related inventions. In recent years, we have seen
new entrants in the industry as new ecosystems have lowered the barriers to entry. In 2012, we
continued to see intensified and more active licensing and enforcement strategies of patents and IPR
emerge through a series of legal disputes between several industry participants as patent holders
sought to protect their IPR against infringements by other device OEMs. It is not only traditional
industry participants that have sought to safeguard their IPR; non-manufacturing IPR licensing entities
owning relevant technology patents have also actively been enforcing their patents against device
OEMs. These companies’ sole business model is to buy patents from the innovators and to maximize
the value from those patents. As a result, the industry’s focus on patents and intellectual property has
increased significantly and patent portfolios have become increasingly valuable for industry
participants. Increased activity has also created lucrative opportunities to monetize patents by selling
them to others. We expect this trend to continue in 2013. We believe we are well-positioned to both
protect our existing business as well as generate incremental value to our shareholders through our
industry-leading IPR portfolio.
We are a world leader in the development of mobile devices and mobile communications technologies,
which is also demonstrated by our strong patent position. During the last two decades, we have
invested approximately EUR 50 billion in research and development and built one of the products
market’s strongest and broadest IPR portfolios, with approximately 10 000 patent families. In 2012, we
continued to work hard to enforce our patents against unlawful infringement and realize the value of
our IPR. Our 2012 initiatives included, among other things, patent suits filed against HTC, BlackBerry
(formerly Research in Motion) and Viewsonic in the US and Germany. We also monetized selected
parts of our patent portfolio through divestments. Furthermore, Nokia acquired additional IPR in the
imaging area in conjunction with the Scalado acquisition, completed in July 2012.
HERE (formerly Location & Commerce)
Our HERE business develops a range of location-based products and services for consumers, as well
as platform services and local commerce services for device manufacturers, application developers,
Internet services providers, merchants and advertisers. The business was initially formed under the
name Location & Commerce during 2011 by the combination of our Devices & Services social location
services operations and our NAVTEQ business. Beginning October 1, 2011, this business assumed
profit-and-loss responsibility and end-to-end accountability for the full consumer experience. While
continuing to serve NAVTEQ’s existing customers both in terms of provision of content and as a
business-to-business provider of map data, the business is also developing location-based offerings in
support of our strategic goals in feature phones and smartphones, as well as developing a platform for
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