Nokia 2014 Annual Report Download - page 79

77NOKIA IN 2014
Board review
Risks related specically
to Nokia Networks
In addition to the other risks described in this
section, the following are risks specically
related to our Nokia Networks business.
■Nokia Networks focuses on mobile
broadband and accordingly its sales and
profitability depend on its success in the
mobile broadband infrastructure and
related services market. Nokia Networks
may fail toexecute its strategy or to
effectively and profitably adapt its business
and operations in a timely manner to the
increasingly diverse solution needs of its
customers insuch market or to such
technological developments.
■Nokia Networks faces intense competition
and may fail to effectively and profitably
invest in new competitive high-quality
products, services, upgrades and
technologies and to bring them to
market ina timely manner.
■Nokia Networks is dependent on a limited
number of customers and large multi-year
agreements and accordingly a loss of
asingle customer, further operator
consolidation or issues related to a single
agreement, may have a significant impact
onNokia Networks.
■We may fail to manage our manufacturing,
service creation and delivery, as well
as our logistics efficiently, and without
interruption, or the limited number of
suppliers we depend on may fail to deliver
sufficient quantities of fully functional
products and components or deliver timely
services meeting our customers’ needs.
■Nokia Networks may be adversely affected
by developments with respect to the
customer financing or extended payment
terms it provides to customers.
Risks related specically to HERE
In addition to the other risks described in this
section, the following are risks specically
related to our HERE business.
■Our HERE business strategy is subject to
risks and uncertainties, including intense
competition faced by HERE, and may fail
toeffectively and profitably invest in new
competitive high-quality services and data
and bring these to market in a timely
manner or adjust its operations efficiently.
■Our HERE business sales are dependent
onthe overall automotive market
developments and customer
businessconditions.
■Our HERE business sales, especially with
respect sales to the automotive industry
are derived from a limited number of
customers and large multi-year agreements
and accordingly a loss of a single customer
orissues related to a single agreement,
mayhave a significant impact on HERE.
Risks related specically
to Nokia Technologies
In addition to the other risks described in this
section, the following are risks specically
related to our Nokia Technologies business.
■Our patent licensing income and other
intellectual property related revenue are
subject to risks and uncertainties and will
beadversely affected if we are not able to
maintain the existing sources of intellectual
property related revenue or establish new
sources. Additionally, our patent licensing
income is dependent on a limited number
of key licensees that contribute
proportionally significant patent licensing
income. Samsung is one of such key
licensees of Nokia, and therefore, the
outcome of the binding arbitration
expected in 2015 may have a significant
effect on Nokia’s patent licensing income
going forward.
■Licensing our patents or other IPR portfolio
and otherwise monetizing our intellectual
property assets rely on adequate regulatory
protection for patented or other
proprietary technologies.
■The Nokia Technologies business aims
to generate net sales and profitability
through business areas such as technology
licensing, licensing the Nokia brand and
other business ventures including
technology innovation and incubation,
which may not materialize asplanned
or at all.
Board of Directors, Nokia Corporation
March 19, 2015