Blackberry 1998 Annual Report Download - page 7

benefits of RIM’s core two-way paging technology
give it a significant competitive advantage over the
limited applications of one-way products which
cannot respond to or initiate messages.
Furthermore, in an industry where no single
wireless network has yet emerged as dominant,
the flexible design and universal network access
provided by our products translate into considerable
end-user appeal. For these reasons, together with
our well-defined strategic focus, we believe RIM
will outperform the industry in the years ahead.
RIM ended 1998 with an exceptionally strong
balance sheet to take advantage of the opportunities
in its markets. Cash and short-term investments of
$109 million – largely IPO proceeds – accounted for
more than two-thirds of total assets, and RIM was
virtually debt-free. In fiscal 1999, we intend to use
about $12 million of this cash for new equipment,
$30 million for inventory, $5 million for sales and
marketing initiatives, and $5 million for R&D.
Future R&D will be targeted at 10% to 15% of sales.
Specific plans include the development and launch of
next generation two-way pagers and radio modems;
a new $19.1 million R&D project to further advance
two-way messaging technology, for which we
received a commitment of $5.7 million from
Technology Partnerships Canada in May of 1998;
the expansion of our Waterloo R&D facility by 22,500
square feet; and the addition of new machines, surface
mount lines and automated back-end testing systems.
These latter two initiatives are geared towards filling
our fiscal 1999 customer order backlog and meeting
anticipated growth in customer demand.
We will also devote our energies to technology
partnerships for device integration; jointly develop
future generation silicon with Intel and Analog
Devices; continue pursuing design integration wins
with OEM manufacturers in North America and Asia;
and continue broadening the number of global
network partners.
To carry out these plans, RIM intends to hire 200
employees during fiscal 1999: 50 in research and
development, 25 in sales and marketing, 10 in
administration, and 115 in manufacturing.
We believe our many achievements in fiscal 1998
and our plans for 1999 demonstrate that RIM is indeed
delivering and will continue to deliver on the promise
we exhibited at the time of our IPO. We extend our
appreciation to all our stakeholders for helping to
make it possible.
Mike Lazaridis Jim Balsillie
President & Co-CEO Chairman & Co-CEO
May 28, 1998
LETTER TO SHAREHOLDERS
5
RIM Employee Skillset
Finance &
Admin.
Sales &
Marketing
Manufacturing
Research &
Development
85
71
29
15
0
2
4
6
8
95 96 97 98
R&D Spending
($ in millions)