Nokia 2004 Annual Report Download - page 41

Competition
Mobile Devices
For 2004, the total mobile device sales volume achieved by the Mobile Phones, Multimedia and
Enterprise Solutions business groups reached a record of 207.7 million units, representing growth
of 16% compared with 2003. Based on an estimated global market volume for mobile devices of
643 million units, our global market share was 32% for 2004, according to Nokia’s estimates,
compared with an estimated 38% for 2003. Nokia is the market leader with market share that is
twice that of our nearest competitor.
Mobile phone market participants compete mainly on the basis of the breadth and depth of their
product portfolios, price, operational and manufacturing efficiency, technical performance, product
features, quality, customer support, and brand recognition. Mobile network operators are
increasingly offering mobile phones under their own brand, which may result in increasing
competition from non-branded mobile device manufacturers.
Historically, our principal competitors in mobile devices have been other mobile communications
companies such as LG, Motorola, Samsung, Siemens and Sony Ericsson. However, we face new
competition, particularly in Multimedia and Enterprise Solutions where we compete with
consumer electronics manufacturers and business device and solution providers, respectively.
Further, as the industry now includes increasing numbers of participants who provide specific
hardware and software layers within products and solutions, we will compete at the level of
these layers rather than solely at the level of products and solutions. Examples of such layers
include operating system and user interface software, chipsets, and application software, such as
games software. As a result of these developments, we face new competitors such as, but not
limited to, Dell, HP, Microsoft, Nintendo, Palm, Research in Motion and Sony, and we will also face
a large number of smaller competitors and some of our traditional competitors in new areas.
It is difficult to predict how the competitive landscape of the mobile communications industry will
develop in the future. In the mobile communications industry, the parameters of competition are
less firmly established than in mature, low-growth industries, where the competitive landscape
does not change greatly from year to year. See ‘‘Item 3.D Risk Factors—Competition in our industry
is intense. Our failure to respond successfully to changes in the competitive landscape may have a
material adverse impact on our business and results of operations.’’
Infrastructure
In the network infrastructure business, our principal competitors include Alcatel, Ericsson, Huawei,
Lucent, Motorola, NEC, Nortel and Siemens. Competition in both the 2G and the 3G network
infrastructure market remains intense. In 2G, competition is driven by price, solutions that are
able to offer low total cost of ownership, and the vendor’s ability to roll-out mobile networks in
new growth markets. In 3G technology, vendors compete on the grounds of price, track record of
network implementations, and which future technologies they plan to offer and when, such as
HSDPA, or High Speed Downlink Packet Access, which provides high speed data delivery to 3G
terminals to support multimedia services.
In the infrastructure side of the Enterprise Solutions business, our principal competitors are Cisco
and Juniper Networks.
Seasonality
For information on the seasonality of our business, please see ‘‘Item 5.A Operating Results—Certain
Other Factors—Seasonality’’.
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