Nokia 2006 Annual Report Download - page 41

Our consulting and systems integration business brings us into direct competition with traditional
systems integrators and consulting companies such as IBM, HP, and Accenture, as well as a large
number of local and regional systems integrators.
On the security infrastructure side of the Enterprise Solutions business, our principal competitors are
Cisco and Juniper Networks. In software, Enterprise Solutions’ Intellisync mobile software offering
competes with Visto, Good (acquired by Motorola in January 2007), RIM and Sybase subsidiary
iAnywhere Solutions.
See ‘‘Item 3.D Risk Factors—Competition in our industry is intense. Our failure to maintain or
improve our market position and respond successfully to changes in the competitive landscape may
have a material adverse impact on our business and results of operations.’’
Seasonality
For information on the seasonality of our business, please see ‘‘Item 5.A Operating Results—
Overview—Certain Other Factors—Seasonality.’’
Patents and Licenses
A high level of investment in research and development and rapid technological development has
meant that the role of Intellectual Property Rights, or IPR, in our industry has always been
important. Digital convergence, multiradio solutions, alternative radio technologies, and differing
business models combined with large volumes are further increasing the complexity and importance
of IPR.
The detailed designs of our products are based primarily on our own research and development
work and design efforts, and generally comply with all relevant and applicable public standards. We
seek to safeguard our investments in technology through adequate intellectual property protection,
including patents, design registrations, trade secrets, trademark registrations and copyrights. In
addition to safeguarding our technology advantage, they protect the unique Nokia features, look and
feel, and brand.
Nokia has built its IPR portfolio since the early 1990s, investing close to EUR 30 billion in research
and development, and we now own more than 11 000 patent families. As a leading innovator in the
wireless space, we have built what we believe to be one of the strongest and broadest patent
portfolios in the industry, extending across all major cellular and mobile communications standards,
data applications, user interface features and functions and many other areas. We receive royalties
from certain handset and other vendors under our patent portfolio.
Nokia is a world leader in the development of the wireless technologies of GSM/EDGE, 3G/WCDMA,
HSPA, OFDM, WiMax, LTE and TDSCDMA, and we have a robust patent portfolio in all of those
technology areas, as well as for CDMA2000. We believe our standardsrelated essential patent
portfolio is one of the strongest in the industry. In GSM, Nokia has declared more than 250 GSM
essential patents with a particular stronghold in codec technologies and in mobile packet data.
Nokia’s major contribution to WCDMA development is demonstrated by approximately 350 essential
patent declarations to date. The number of WCDMA essential patents is expected to increase further
due to the rapid development of higher data rate technologies, an area where Nokia is a particularly
strong contributor. Additionally, we have successfully expanded our patent portfolio beyond wireless
to other areas like multimedia technologies and GPS. For example, in October 2006 we signed an
agreement with Trimble, which gives us full access to their world class GPS patent portfolio for our
own unrestricted use and for sublicensing purposes in the wireless consumer product and service
space.
Nokia is a holder of numerous essential patents for various mobile communications standards. An
essential patent covers a feature or function that is incorporated into an open standard that all
manufacturers are required to meet in order to comply with the standard. In accordance with the
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