Blackberry 2012 Annual Report Download - page 56

Intense competition, rapid change and significant strategic alliances within the Company’s industry, including potential
future strategic transactions by its competitors or carrier partners, could weaken the Company’s competitive position or
may require the Company to reduce its prices to compete effectively.
The Company is engaged in an industry that is highly competitive and rapidly evolving, and has experienced, and expects to continue
to experience, intense competition from a number of companies. No technology has been exclusively or commercially adopted as the
industry standard for wireless communication. Accordingly, both the nature of the competition and the scope of the business
opportunities afforded by the market in which the Company competes are uncertain. The Company’s competitors, including new
market entrants, may implement new technologies before the Company does, and the number of new entrants in the wireless
communications industry can make it more difficult for the Company to differentiate its products and services. In addition, the
Company’s competitors may deliver new products and services earlier, or provide more attractively-priced, enhanced or better quality
products and services than the Company does, which may, among other things, increase pressure on the Company to discount pricing
on its existing and future products. In particular, BlackBerry smartphones and BlackBerry PlayBook tablet sales and shipments in
fiscal 2012 were impacted by the highly competitive environment in the United States, where the Company experienced a substantial
decline in its largest market and a net decrease in its subscriber base, which resulted in lower than expected revenue, earnings and a
loss of market share in fiscal 2012. The Company has also encountered challenges due to the impact of BYOD strategies being
adopted by some of its enterprise customers, as some information technology departments that previously required employees to use
the BlackBerry wireless solution because of its emphasis on security and reliability are permitting employees to choose devices
offered by the Company’s competitors.
The Company also expects that additional competition will develop, both from existing companies in the wireless communications
industry and from new entrants, as demand for wireless access products and services expands and as the market for these products and
services becomes more established. In addition, network infrastructure developers, independent software vendors, smartphone
vendors, PC, PDA and tablet vendors, Internet application vendors, key network operators, content providers and others may seek to
provide integrated wireless solutions that compete with the Company’s products and services. The impact of competition could result
in fewer customer orders, loss of market share and reduced gross and operating margins. In addition, customers that may question the
Company’s ability to compete or remain viable as a provider of mobile communications solutions over the longer term could decide
to replace the Company’s products and services with those of its competitors. There can be no assurance that the Company will be
able to compete successfully and withstand competitive pressures.
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