Blackberry 2012 Annual Report Download - page 192

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations - Fiscal 2012 Compared to Fiscal 2011 and Fiscal 2010
Fiscal year ended March 3, 2012 compared to fiscal year ended February 26, 2011
Revenue
Revenue for fiscal 2012 was $18.4 billion, a decrease of $1.5 billion, or 7.4%, from $19.9 billion in fiscal 2011.
A comparative breakdown of the significant revenue streams is set forth in the following table:
Hardware revenue decreased by $2.2 billion, or 13.5%, to $13.8 billion, or 74.8% of consolidated revenue, in fiscal 2012 compared to
$16.0 billion or 80.2% of consolidated revenue in fiscal 2011. This decrease in hardware revenue over the prior fiscal year was
attributable to the mix of BlackBerry handheld devices sold during fiscal 2012, which were made up of devices that have lower
average selling prices compared to those sold in fiscal 2011, as well as a lower volume of handheld shipments. The Company shipped
approximately 49.0 million BlackBerry handheld devices in fiscal 2012 compared to 52.3 million devices in fiscal 2011. The decrease
in the number of BlackBerry handheld devices was due to a number of factors, principally increased competition in the Company’s
industry, particularly in the United States, as well as delays in new product introductions. In the first quarter of fiscal 2012, the
Company observed that its then-existing portfolio of BlackBerry handheld devices had been in market for close to a year and
delivering new products on a timely basis had been more challenging than the Company had anticipated. RIM had been making
progress on a development path for the next generation of BlackBerry handheld devices when it determined it needed to make more
significant upgrades to both hardware and software to address the impact of increasing competition in the smartphone market,
particularly in the United States. Consequently, the Company made the
22
For the Fiscal Year Ended
March 3, 2012 February 26, 2011 Change 2012/2011
Millions of BlackBerry handheld devices sold
49.0 52.3 (3.3) (6.3%)
Millions of BlackBerr
y
Pla
y
Book tablets sold 1.3
—
1.3 100%
Revenue (in millions)
Hardware $13,794 74.8% $15,956 80.2% $(2,162) (13.5%)
Service
4,086 22.2% 3,197 16.1% 889 27.8%
Software 318 1.7% 294 1.5% 24 8.2%
Other
237 1.3% 460 2.2% (223) (48.5%)
$18,435 100.0% $19,907 100.0% $(1,472) (7.4%)
(1) During the third quarter of fiscal 2012, the Company experienced the Q3 Service Interruption, which resulted in the loss of
service revenue and the payment of penalties of approximately $54 million related to the unavailability of the Company’s
network.
(1)