Nokia 2011 Annual Report Download - page 27

Nokia-based online advertising platform on our smartphones and increased monetization
opportunities for us in services, may not materialize as expected, or at all.
• The implementation and ongoing fostering and development of the Microsoft partnership may
cause dissatisfaction and adversely affect the terms on which we do business with our other
partners, mobile operators, distributors and suppliers, or foreclose the ability to do business
with new partners, mobile operators, distributors and suppliers.
• The assessment of our partnership with Microsoft and new strategy could cause lowered
credit ratings of our short and long-term debt or their outlook from the credit rating agencies
and, consequently, impair our ability to raise new financing or refinance our current
borrowings and increase our interest costs associated with any new debt instruments.
Our failure to keep momentum and increase our speed of innovation, product development and
execution will impair our ability to bring new innovative and competitive mobile products and
location-based or other services to the market in a timely manner.
We need to identify and understand the key market trends and user segments to address consumers’
expanding needs in order to bring new innovative and competitive mobile products and location-based
or other services to market in a timely manner. We must follow, anticipate and be able to respond with
speed to these key market trends, and actively create future trends in the market, through our product
development processes. We also need to execute efficiently in creating and developing competitive
products, and in bringing our products to market in a timely manner with compelling marketing
messages that succeed in retaining and engaging our current, and attracting new, customers and
consumers.
Our inability to innovate, develop and bring our mobile products and location-based or other services to
market and delays in the ramp up of new product deliveries may result from a variety of factors,
including failure to anticipate consumer trends and needs; insufficient and ineffective internal and
external execution in our research and product development processes; an inability to secure
necessary components or software assets from suppliers in sufficient quantities on a timely basis; or
an inability to improve our time to market, including the introduction of innovations, through execution
challenges in relation to our recently announced planned shift of most of our mobile device assembly to
our manufacturing facilities in Asia where a majority of our suppliers are located. Additionally, the
software complexity and integration of the hardware and software functionalities may cause
unforeseen delays even close to the anticipated launch of the mobile product. We continue to be
dependent on component providers, contract manufacturers, application developers and other
partners, which can lead to additional challenges and delays that are largely outside of our control.
We operate in a fast paced and innovative industry. Our business may require significant investment to
innovate and grow successfully. Such investments may include research and development, licensing
arrangements, acquiring businesses and technologies, recruiting specialized expertise and partnering
with third parties. Those investments may not, however, result in technologies, products or services
that achieve or retain broad or timely market acceptance or are preferred by application developers,
our customers and consumers. We have also made, and may make in the future, such investments
through acquisitions. We may, however, fail to successfully complete planned acquisitions or integrate
the acquired businesses or assets or retain and motivate their key employees.
Our ability to innovate and the need to increase the speed of our product development and execution
are critical to the success of our current strategies, for instance the implementation of Windows Phone
as our primary smartphone platform, product and service development for our Mobile Phones business
unit and in bringing products and location-based or other services to market in a timely manner. In
addition to the factors described above, delays in innovation, product development and execution may
result from the added complexity of working in partnership with Microsoft to produce Nokia products
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