Blackberry 1998 Annual Report Download - page 6

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Developing and strengthening strategic
alliances with industry leaders
We strengthened and added to an already impressive
list of strategic alliances with major network operators
and channel partners, wireless network infrastructure
suppliers, manufacturers, and wireless technology
innovators in 1998.
RIM is a key partner of the major wireless networks
in the US, namely, BellSouth’s Mobitex network and
the AMSC/ARDIS DataTAC network. Both these
networks market our Inter@ctive Pager bundled with
wireless service to high profile corporate customers
as well as to individuals.
Also in 1998, we broadened our relationship with
Intel Corporation, whose $4.1 million equity invest-
ment in RIM in September solidified a partnership
based on advanced silicon development and joint
marketing initiatives. Intel’s leadership in semicon-
ductors ideally complements RIM’s advantages in
wireless technology.
Also noteworthy is the addition of the University of
Toronto to the list of technology partners working
together in the Techfund R&D project. The University
of Toronto joins COM DEV, the University of
Waterloo, McMaster University and RIM in their efforts
to develop next-generation radio modem technology.
Expanding and improving state-of-the-art
production facilities
Last year’s commissioning of our new production
facility in Kitchener, Ontario, allowed us to begin
filling our order backlog and shorten lead times
between initial order placement and shipment to
the customer.
In 1998, we spent an estimated $5 million
expanding our production lines using surface mount
technology and on equipment for product testing
and assembly. We hired 21 people to bolster our
capabilities in purchasing, quality assurance and
control, inventory management and manufacturing
engineering. As at 1998 year end, we were able to
produce approximately 600 devices per day. We
expect to increase this number to an estimated 4,000
per day in fiscal 1999, and have the flexibility to
further expand capacity as industry growth and our
market penetration demand. We therefore believe we
will fill our order backlog on a timely basis in 1999 and
meet expected demand in our emerging market sector.
Investing in highly qualified people
As a knowledge-based company operating in a highly
competitive labour market, our most critical strategic
focus is our investment in people. This past year,
we successfully attracted 70 new employees: 28
in research and development, 10 in sales and
marketing, 11 in administration and finance, and 21
in manufacturing. Just as importantly, we focused
on retaining our existing, highly competent team by
maintaining an innovative culture, providing access to
cutting-edge design and development tools, investing
in training programs, and offering stock options to all
permanent, full-time employees. We also hired a
Director of Organizational Development – a newly
created position – to oversee and manage the entire
staffing function.
Many companies state that people are their most
valuable asset; nowhere is this more true than at RIM.
We spent $7.9 million on our people in 1998, repre-
senting 23% of our total costs. We are realizing an
excellent return on that investment, in terms of
superior products, average business volumes per
employee of $201,000, and a history of technology
awards. The skill sets, education, and training of our
people are second to none.
Outlook
The two-way paging industry in the US is poised
for significant growth. In addition, the number of
applications for wireless messaging using RIM’s
OEM radio modem will continue to expand. RIM has
positioned itself to be the premier supplier of devices
into these two markets and is poised for rapid growth
during fiscal 1999.
In a world where consumers increasingly demand
to be “connected” 24-hours-a-day for both business
and personal purposes, the economical cost and