Blackberry 2007 Annual Report Download - page 31

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• risks associated with acquisitions, investments and other
business initiatives;
• risks associated with RIM’s expanding foreign operations;
• reduced spending by customers due to the uncertainty of
economic and geopolitical conditions;
• dependence on key personnel and RIM’s ability to attract
and retain key personnel;
• reliance on third-party network infrastructure developers
and software platform vendors;
• foreign exchange risks;
• changes in interest rates affecting RIM’s investment
portfolio and the creditworthiness of its investment
portfolio;
• RIM’s ability to manage production facilities and its
reliance on third-party manufacturers for certain products;
• risks associated with short product life cycles;
• government regulation of wireless spectrum and radio
frequencies;
• restrictions on import of RIM’s products in certain
countries due to encryption of the products;
• the costs and burdens of compliance with new
government regulations;
• continued use and expansion of the Internet;
• regulation, certification and health risks and risks relating
to the misuse of RIM's products;
• tax liabilities, resulting from changes in tax laws or
otherwise, associated with RIM’s worldwide operations;
and
• difficulties in forecasting RIM's quarterly financial results
and the growth of its subscriber base.
These factors should be considered carefully, and
readers should not place undue reliance on RIM’s forward-
looking statements. RIM has no intention and undertakes
no obligation to update or revise any forward-looking
statements, whether as a result of new information, future
events or otherwise.
Overview
RIM is a leading designer, manufacturer and marketer of
innovative wireless solutions for the worldwide mobile
communications market. Through the development of
integrated hardware, software and services that support
multiple wireless network standards, RIM provides platforms
and solutions for seamless access to time-sensitive
information including email, phone, short messaging
service (SMS), Internet and intranet-based applications.
RIM technology also enables a broad array of third party
developers and manufacturers to enhance their products
and services with wireless connectivity to data. RIM’s
products, services and embedded technologies are used by
thousands of organizations around the world and include the
BlackBerry® wireless platform, software development tools,
and other hardware and software. The Company’s sales
and marketing efforts include collaboration with strategic
partners and distribution channel relationships to promote
the sales of its products and services as well as its own
supporting sales and marketing teams.
Sources of Revenue
RIM’s primary revenue stream is its BlackBerry wireless
platform, which includes sales of wireless devices, software
and service. The BlackBerry wireless platform provides users
with a wireless extension of their work and personal email
accounts, including Microsoft® Outlook®, Lotus Notes®,
Novell® GroupWise®, MSN®/Hotmail, Yahoo! Mail®, POP3/ISP
email and others.
RIM generates hardware revenues from sales, primarily to
carriers, of BlackBerry wireless devices, which provide users
with the ability to send and receive wireless messages and
data. RIM’s BlackBerry wireless devices also incorporate
a mobile phone, a personal information manager (PIM)
including contact, calendar, tasks and memo functionality,
which can synchronize with the user’s desktop PIM system,
and web-browsing capability. Certain BlackBerry devices
also include multimedia capabilities.
RIM generates service revenues from billings to its
BlackBerry subscriber account base primarily from a monthly
infrastructure access fee to a carrier/distributor where a
carrier or other distributor bills the BlackBerry subscriber.
The BlackBerry subscriber account base is the total of all
subscriber accounts that have an active status at the end
of a reporting period. Each carrier instructs RIM to create
subscriber accounts and determines whether the subscriber