Blackberry 2008 Annual Report Download - page 11

Fellow Shareholders:
Fiscal 2008 was another year of exceptional growth for
Research In Motion (RIM). The BlackBerry® subscriber account
base grew substantially, RIM launched more new BlackBerry
smartphones in fiscal 2008 than ever before and we achieved
record financial results in terms of both revenue and earnings.
As RIM continues to expand the presence of BlackBerry
in both enterprise and consumer markets, we see tremendous
momentum in our business and are confident in the Company’s
ability to continue to grow and succeed in fiscal 2009.
We are proud of the Company’s accomplishments and grateful
to approximately 8,400 employees around the world whose talents,
hard work and determination enabled RIM to once again execute
effectively and deliver solid results. We would like to thank all of
our employees for their commitment to excellence and congratulate
them on another successful year.
We also thank our customers, partners and shareholders whole-
heartedly for their support throughout fiscal 2008.
Some of RIM’s achievements during the past year included:
• Revenuegrew98%toover$6billion;
• TheBlackBerrysubscriberaccountbasereachedover
14million;
• RIMshippedthe25millionthBlackBerrysmartphone;
• Over80newcarrierpartnerswereaddedaroundtheglobe;
• Severalgroundbreakingnewsmartphoneswereintroduced,
including:
• BlackBerry® Curve™ 8300,
• BlackBerry® Curve™ 8310 with GPS,
• BlackBerry® Curve™ 8320 with Wi-Fi b/g,
• BlackBerry®8830WorldEdition,CDMAEV-DOwithGPSand
GSM/GPRS for roaming,
• BlackBerry® 8820 with GPS and Wi-Fi a/b/g,
• BlackBerry® Pearl™ 8120 with Wi-Fi b/g,
• BlackBerry®Pearl™8130,CDMAEV-DOwithGPS,
• BlackBerry® Pearl™8110withGPS;
• TheBlackBerrybrandgrewmorepowerfulandresonatedwith
a mainstream consumer audience, and over half of the net
subscriber account additions in the fourth quarter came from
non-enterprisecustomers;
• BlackBerryAlliancepartnerslaunchedhundredsofsoftwareap-
plicationsandsolutionsfortheBlackBerryplatform;
• BlackBerry® Professional Software was launched for small and
mid-sizedbusinessmarkets;
• BlackBerry® Unite!™ software was introduced for the home and
smallofce/homeofcemarkets;and
• TheBlackBerry® Enterprise Solution became the first mobile plat-
form to receive Common Criteria Evaluation Assurance Level 2+
security certification.
Financial Results and Administration
Revenueinscal2008nearlydoubledto$6.01billionascom-
paredto$3.04billioninthepreviousyear.Hardwarecontinuedto
representthelargestpercentageofrevenueat79.4%,withservice
contributingapproximately14.3%andsoftware,accessories,and
other revenue contributing the remainder.
 Grossmarginfortheyearwas51.3%,downslightlyfromscal
2007. This decline was primarily related to the increased percent-
age of hardware revenue as well as the relative strength of certain
product lines targeted at new market segments.
Year over year smartphone shipments were up more than
110%fromscal2007.Thegrowthwasprimarilyfuelledbystrong
BlackBerry service subscriber growth and a high level of handset
upgrades by loyal customers, as well as an increased number of
handsets being purchased for voice and SMS (Short Message Ser-
vice) services (independent of a BlackBerry service plan).
 Operatingexpensesfortheyeardecreasedasapercentageof
revenue as we leveraged our investments in Research and Develop-
ment and Sales and Marketing to drive growth in new segments,
distribution channels and geographies.
 Netincomeinscal2008morethandoubledto$1.29billionor
$2.26centspersharefullydilutedversus$631.6millionor$1.10
per share fully diluted in the prior year.
 Capitalexpendituresincreasedfrom$254millioninscal2007
to$352millioninscal2008.Suchinvestmentswereprimarilyfor
the acquisition of new facilities and equipment to accommodate our
expanding employee base and the expansion and enhancement of
the BlackBerry Infrastructure.
RIM’s balance sheet remained strong at the end of fiscal 2008
withnegligibledebtandapproximately$2.3billionincash,cash
equivalents, short-term investments and long-term investments.
RIM had approximately 8,400 employees at the end of fiscal
2008,upfromapproximately6,250employeesattheendofscal
2007. In December, we announced the opening of our US head-
quarters in Irving, Texas where we expect to employ over 1,000
people over the next several years. We continue to hire across all
areas of the Company, including R&D, carrier support, business de-
velopment, marketing, customer care and manufacturing. We also
continue to hire co-op students and new graduates from a variety
of universities and colleges to ensure that we continue to have an
influx of young talent.
The BlackBerry Solution
In fiscal 2008, the BlackBerry solution continued to expand in popu-
larity with strong growth in both North American and international
markets. BlackBerry subscriber accounts in markets outside of North
Americaincreasedtoapproximately33%ofthetotalsubscriberac-
countbaseattheendofscal2008,upfrom28%fortheprevious
year. The number of non-enterprise subscriber accounts as of March
1,2008increasedto38%ofthetotalBlackBerrysubscriberaccount
basefrom27%attheendofscal2007.
 Overthecourseoftheyear,RIMaddedimportantnewcar-
rier and distribution partners across Europe, including Carphone
Warehouse in the United Kingdom, and experienced strong ongoing
commitment from existing European partners. In Latin America, we
The Year in Review
9