Blackberry 2010 Annual Report Download - page 30

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Device revenue increased by $4.32 billion, or 90.6%, to $9.09 billion, or 82.1% of consolidated revenue, in fiscal
2009 compared to $4.77 billion, or 79.4%, of consolidated revenue in fiscal 2008. This increase in device
revenue over the prior year was primarily attributable to a volume increase of approximately 12.2 million units,
or 88.7%, to approximately 26.0 million devices in fiscal 2009 compared to approximately 13.8 million devices
in fiscal 2008. ASP increased to $349 in fiscal 2009 from $346 in fiscal 2008 due primarily to a change in the
BlackBerry device mix of certain new products that were feature rich and designed to operate on new network
technologies.
Service revenue increased by $541.9 million, or 63.0%, to $1.40 billion or 12.7% of consolidated revenue in fiscal
2009 compared to $860.6 million, or 14.3% of consolidated revenue in fiscal 2008, reflecting the Company’s
increase in BlackBerry subscriber accounts since fiscal 2008. Net BlackBerry subscriber account additions
were approximately 11 million for fiscal 2009 compared to approximately 6.1 million for fiscal 2008. The total
BlackBerry subscriber account base at the end of fiscal 2009 was approximately 25 million compared to
approximately 14 million at the end of fiscal 2008. The percentage of the subscriber account base outside of
North America at the end of fiscal 2009 was approximately 32%.
Software revenue includes fees from licensed BES software, CALs, technical support, maintenance and
upgrades. Software revenue increased $17.5 million, or 7.5%, to $251.9 million in fiscal 2009 from $234.4 million in
fiscal 2008. The majority of the increase was attributable to maintenance and CALs, offset by a decrease in
BES and other software revenues.
Other revenue, which includes accessories, non-warranty repairs, NRE and gains and losses on revenue
hedging instruments, increased by $175.3 million to $321.0 million in fiscal 2009 compared to $145.8 million in
fiscal 2008. The majority of the increase was attributable to increases in non-warranty repair, gains realized
from revenue hedging instruments and sales of accessories.
Gross Margin
Consolidated gross margin increased by $2.02 billion, or 65.5%, to $5.10 billion, or 46.1% of revenue, in fiscal
2009, compared to $3.08 billion, or 51.3% of revenue, in fiscal 2008. The decrease of 5.2% in consolidated gross
margin percentage was primarily due to a decrease in the blended device margins primarily driven by the
introduction of certain new feature rich products that incorporated new technologies which were adopted at a
faster rate than historically, lower than anticipated unit shipments of previous generation products, and a
higher percentage of device shipments which comprised 82.1% of the total revenue mix in fiscal 2009
compared to 79.4% in fiscal 2008. Gross margin percentage for devices is generally lower than the Company’s
consolidated gross margin percentage. The decrease in gross margin percentage relating to devices 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.
Operating Expenses
The table below presents a comparison of research and development, selling, marketing and administration,
and amortization expenses for fiscal 2009 compared to fiscal 2008.
(in thousands)
%of
Revenue
%of
Revenue
%of
Change
February 28, 2009 March 1, 2008
Change — Fiscal
2009/2008
For the Fiscal Year Ended
Revenue ..................................... $ 11,065,186 $ 6,009,395 $ 5,055,791 84.1%
Operating expenses
Research and development ........ $ 684,702 6.2% $ 359,828 6.0% $ 324,874 90.3%
Selling, marketing and
administration......................... 1,495,697 13.5% 881,482 14.7% 614,215 69.7%
Amortization ............................... 194,803 1.8% 108,112 1.8% 86,691 80.2%
Total .......................................... $ 2,375,202 21.5% $ 1,349,422 22.5% $ 1,025,780 76.0%
Total operating expenses for fiscal 2009 as a percentage of revenue decreased by 1.0% to 21.5% of revenue
compared to fiscal 2008.
MD&A
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