Blackberry 2012 Annual Report Download - page 55

The Company has over the past year encountered delays relating to new product introductions, and delivering new products on a
timely basis has proven more challenging than the Company had anticipated. As noted above, the process of developing new
technology is complex and uncertain, and involves time, substantial costs and risks of delays for technological or other reasons, some
of which may be beyond the Company’s control. For example, in fiscal 2012, the introduction of the Company’s BlackBerry 7
smartphones were delayed, in part, because of challenges relating to the carrier lab entry and certification process, which contributed
to lower than expected unit shipments as customers worked through inventory and awaited the launch of the new BlackBerry 7
smartphones. In addition, the BlackBerry PlayBook OS 2.0 software release was delayed until February 2012, and the Company
recorded a pre-tax provision in the third quarter of fiscal 2012 of approximately $485 million (approximately $356 million after tax),
related to its inventory valuation of BlackBerry PlayBook tablets as a result of lower than anticipated demand. The Company also
announced in December 2011 that its BlackBerry 10 smartphones would not be available until the latter part of calendar 2012. As was
the case with the BlackBerry 7 smartphones, delays in the introduction of the BlackBerry 10 smartphones have contributed to lower
than expected unit shipments and a loss of market share as customers await the launch of the new BlackBerry 10 smartphones. If the
Company experiences further delays relating to the launch of its BlackBerry 10 smartphones or other products or services, such
delays could have a material adverse affect on the Company’s business, results of operations, financial condition and future prospects.
There cannot be any assurance that the technologies and related hardware or software products and services that the Company
develops will be brought to market by it or network operators as quickly as anticipated or that they will achieve broad customer
acceptance among operators or end-users.
The Company’s ability to compete successfully will depend in large measure on its ability to maintain a technically skilled research
and development staff and to adapt to technological changes and advances in the industry, including providing for the continued
compatibility of its products and services with evolving industry standards and protocols and competitive network operating
environments.
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