Blackberry 2005 Annual Report Download - page 24

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Results of Operations
Fiscal year ended February 26, 2005 compared to the fiscal year ended February 28, 2004
Revenue
Revenue for fiscal 2005 was $1,350.4 million, an increase of $755.8 million, or 127.1%, from $594.6 million
in the preceding year.
A comparative breakdown of the significant revenue streams is set forth in the following table:
Fiscal 2005 Fiscal 2004 Change – Fiscal 2005/2004
Number of handhelds sold 2,444,000 920,000 1,524,000 165.7%
ASP $382 $373 $9 2.4%
BlackBerry subscribers
at fiscal year end 2.51 million 1.07 million 1.44 million 135.2%
Revenues
Handhelds $933,989 69.2% $343,154 57.7% $590,835 172.2%
Service 235,015 17.4% 171,215 28.8% 63,800 37.3%
Software 131,811 9.8% 47,427 8.0% 84,384 177.9%
Other 49,632 3.6% 32,820 5.5% 16,812 51.2%
$1,350,447 100.0% $594,616 100.0% $755,831 127.1%
Handheld product revenues increased by $590.8 million, or 172.2%, to $934.0 million, or 69.2% of
consolidated revenues, in fiscal 2005 compared to $343.2 million, or 57.7% of consolidated revenues, in fiscal
2004. This increase in handheld revenues over the prior year is primarily attributable to a volume increase
of 165.7% or 1.52 million units to approximately 2.44 million units from approximately 0.92 million units in
the prior year. The Company has launched a number of new products in the current fiscal year which operate
on the GPRS, iDEN and CDMA20001X wireless networks and expanded its customer base of carrier customers,
which account for the volume growth. The Company reconciles handset shipments and estimated carrier
channel inventory levels with forecasted subscriber additions. Recently, some of the Company’s carrier
customers appear to be reducing their inventory levels in relation to their subscriber additions. The Company
expects this trend to continue through the first half of fiscal 2006 and will continue to monitor carrier channel
inventory levels with carrier customers. ASP increased 2.4% or $9 in fiscal 2005 to $382 per unit from $373
per unit in fiscal 2004, primarily as a result of the increase in color handhelds to nearly 100% of the handheld
product mix in the current fiscal year, and which have higher ASP’s than monochrome handheld products.
The Company expects its ASP for handhelds to decline over the longer term as a result of the introduction
of its lower priced 7100 series during the third quarter of fiscal 2005 and projected future sales volumes,
a continued drive to expand the Company’s prosumer offering, BIS, and increased competition in the industry.
The Company estimates that a $10 change in ASP would result in an annual revenue change of approximately
$24.4 million, based upon the Company’s volume of handhelds shipped in fiscal 2005.
Service revenue increased $63.8 million, or 37.3%, to $235.0 million and comprised 17.4% of consolidated
revenue in fiscal 2005 compared to $171.2 million, or 28.8% of consolidated revenue, in fiscal 2004.
BlackBerry subscribers increased by net 1.44 million, or 135.2%, to approximately 2.51 milllion as at February
26, 2005 from approximately 1.07 million as at February 28, 2004. The Company has also continued to
experience the expected net migration of its direct (“full email”) BlackBerry subscriber base to its carrier
customers (“net migration”), for whom RIM provides lower priced “relay” services.
Research In Motion Limited •Incorporated Under the Laws of Ontario (In thousands of United States dollars, except per share data, and except as otherwise indicated)