Nokia 2015 Annual Report Download - page 72

70 NOKIA IN 2015
Risk factors
Set forth below is a description of
risk factors that could aect us.
Shareholders and potential
investors should carefully review
the following risk factors, in
addition to other information
contained in this annual report.
However, there may be additional
risks that are unknown to us and
other risks currently believed to be
immaterial that could turn out to
be material.
These risks, either individually or together,
could adversely aect for instance our
business, sales, protability, results of
operations, nancial condition,
competitiveness, costs, expenses, liquidity,
market share, brand, reputation and share
price from time to time. Unless otherwise
indicated or the context otherwise requires,
references in these risk factors to “Nokia”,
the“Nokia Group”, “Group”, “we”, “us” and
“our” mean Nokia’s consolidated operating
segments, including Alcatel Lucent. Certain
risks or events as indicated may be more
prevalent with respect to Nokia or a certain
business group, business or part of the Group.
Additional risks and uncertainties not
presently known to us, or that are currently
believed to be immaterial, could impair
ourbusiness or the value of an investment
made in it. This annual report also contains
forward-looking statements that involve
risksand uncertainties presented in
“Forward-looking statements” below.
■ Our strategy is subject to various risks
anduncertainties, including that we may
beunable to successfully implement our
strategic plans, sustain or improve the
operational and financial performance of
our business groups, correctly identify or
successfully pursue business opportunities
or otherwise grow our business.
■ We may be unable to realize the anticipated
benefits from the acquisition of Alcatel
Lucent or implement our organizational
andoperational structure efficiently or
within the timeframe currently anticipated,
including successfully implementing our
business plans, successfully integrating
Alcatel Lucent’s business or achieving the
targeted synergies and other efficiencies.
■Our failure to promptly complete the
purchases of the remaining outstanding
Alcatel Lucent securities could adversely
affect the market value of our shares and
ADSs, and we may be unable to fully realize
the anticipated benefits of the public
exchange offer for all outstanding Alcatel
Lucent securities.
■We may be materially and adversely
affected by general economic and market
conditions and other developments in the
economies where we operate.
■ We are dependent on the development
ofthe industries in which we operate,
including the information technology and
communications industries and related
services market. The telecommunications
industry is cyclical and is affected by
manyfactors, including the general
economic environment, purchase
behavior,deployment, roll-out timing
andspending by service providers,
consumers and businesses.
■We conduct our business globally,
exposingus to political and other regional
developments, including in emerging
market countries, which may have a higher
degree of regulatory or political risk,
including unfavorable or unpredictable
treatment in relation to tax matters,
exchange controls, and other restrictions.
■We face intense competition and may fail
toeffectively and profitably invest in new
competitive high-quality products, services,
upgrades and technologies or bring them
to market in a timely manner.
■We are dependent on a limited number
ofcustomers and large multi-year
agreements. Accordingly, a loss of a single
customer, operator consolidation or issues
related to a single agreement may have a
material adverse effect on our business.
■The Nokia Technologies business group’s
patent licensing income and other
intellectual property-related revenues
aresubject to risks and uncertainties such
as our ability to maintain our existing
sources of intellectual property-related
revenue or establish new sources for
revenue. A proportionally significant share
of the current patent licensing income is
generated from the smartphone market
which has proven to be rather dynamic and
features a limited number of large vendors.
■Our products, services and business
models depend on IPR technologies that we
have developed as well as technologies that
are licensed to us by certain third parties.
As a result, evaluating the rights related to
the technologies we use or intend to use
isincreasingly challenging, and we expect
tocontinue to face claims that we have
allegedly infringed third parties’ IPR. The
use of these technologies may also result in
increased licensing costs for us, restrictions
on our ability to use certain technologies
inour products and/or costly and time
consuming litigation.
■Our business is subject to direct and
indirect regulation. As a result, changes
invarious types of regulations or their
application, as well as economic and
tradepolicies applicable to current or
newtechnologies or products, may
adversely affect our business and results
ofoperations. Our governance, internal
controls and compliance processes could
also fail to prevent regulatory penalties,
both at operating subsidiaries and in
jointventures.