Blackberry 2008 Annual Report Download - page 40

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RESEARCH IN MOTION LIMITED
management’s discussion and analysis of financial
condition and results of operations continued
FOR THE THREE MONTHS AND FISCAL YEAR ENDED MARCH 1, 2008
38
Software revenue increased $13.8 million to $63.1 million
and comprised 3.4% of consolidated revenue in the fourth
quarter of fiscal 2008, compared to $49.3 million, or 5.3% of
consolidated revenue, in the fourth quarter of fiscal 2007.
Other revenue increased by $16.5 million to $42.7 million in
the fourth quarter of fiscal 2008 compared to $26.2 million in
the fourth quarter of fiscal 2007. The majority of the increase
was attributable to increases in accessories and non-warranty
repair revenues.
Gross Margin
Gross margin increased by $470.8 million, or 94.7%, to
$968.2 million, or 51.4% of revenue, in the fourth quarter of fiscal
2008, compared to $497.4 million, or 53.5% of revenue, in the
same period of the previous fiscal year. The 2.1% decline in
consolidated gross margin percentage was primarily due to
a higher percentage of device shipments which comprised
80.9% of the total revenue mix in the fourth quarter of fiscal
2008 compared to 73.4% in the fourth quarter of fiscal 2007,
as well as changes in the BlackBerry device mix. Gross
margin percentage for devices is generally lower than the
Company’s consolidated gross margin percentage. The
decrease in gross margin percentage relating to the increase
in percentage of device shipments was offset in part by
improved service margins resulting from cost efficiencies
in RIM’s network operations infrastructure as a result of the
increase in BlackBerry subscriber accounts and a decline in
certain fixed costs as a percentage of consolidated revenue
as the Company continues to realize economies of scale in its
manufacturing operations.
Q4 Fiscal 2008 Q4 Fiscal 2007 Change - Fiscal
2008/2007
Number of devices sold 4,372,000 2,029,000 2,343,000 115.5%
ASP $ 348 $ 336 $ 12 3.7%
Revenues
Devices $ 1,523,167 80.9% $ 682,766 73.4% $ 840,401 123.1%
Service 253,744 13.5% 172,131 18.5% 81,613 47.4%
Software 63,071 3.4% 49,259 5.3% 13,812 28.0%
Other 42,723 2.2% 26,237 2.8% 16,486 62.8%
$ 1,882,705 100.0% $ 930,393 100.0% $ 952,312 102.4%
Device revenue increased by $840.4 million, or 123.1%, to
$1.52 billion or 80.9% of consolidated revenue, in the fourth
quarter of fiscal 2008 compared to $682.8 million, or 73.4%
of consolidated revenue, in the fourth quarter of fiscal 2007.
This increase in device revenue over the prior year’s period is
attributable to the volume increase of 2.3 million devices, or
115.5%, to approximately 4.4 million devices sold in the fourth
quarter of fiscal 2008, compared to approximately 2.0 million
devices sold in the fourth quarter of fiscal 2007. The increase
in device shipments in the fourth quarter of fiscal 2008 when
compared to the third quarter of fiscal 2008 shipments of
approximately 3.9 million devices primarily reflects the impact
of newly introduced products launched in the previous
quarters. ASP increased to $348 in the fourth quarter of
fiscal 2008 from $336 in the fourth quarter of fiscal 2007 due
primarily to a change in the BlackBerry device mix.
Service revenue increased $81.6 million, or 47.4%, to
$253.7 million and comprised 13.5% of consolidated revenue
in the fourth quarter of fiscal 2008, compared to $172.1 million,
or 18.5% of consolidated revenue in the fourth quarter of
fiscal 2007. BlackBerry subscriber account additions increased
by approximately net 2.18 million in the fourth quarter of
fiscal 2008 to over 14 million subscriber accounts as at
March 1, 2008 with over 33% of RIM’s subscriber account base
being outside of North America, compared to an increase
of approximately net 1.0 million during the fourth quarter of
fiscal 2007 to approximately 8 million subscriber accounts
as at March 3, 2007. The increase in subscriber accounts
in the fourth quarter of fiscal 2008 when compared to the
third quarter of fiscal 2008 additions of approximately net
1.65 million primarily reflects the impact of the new product
launches noted above.
Revenue
Revenue for the fourth quarter of fiscal 2008 was $1.88 billion,
an increase of $952.3 million, or 102.4% from $930.4 million in
the fourth quarter of fiscal 2007.
A comparative breakdown of the significant revenue
streams is set forth in the following table: