Blackberry 2012 Annual Report Download - page 57

Some of the Company’s competitors have greater name recognition, larger customer bases and significantly greater financial,
technical, marketing, public relations, sales, distribution and other resources than the Company does, and such competitors have
increased their market share at the expense of the Company. This is particularly the case in the tablet segment where the Company
has faced challenges entering and in which there are many established computer and wireless communications industry participants
with significantly greater experience, infrastructure and distribution channels than the Company. The Company’s entry into the tablet
market has required and will continue to require significant investment to innovate and grow successfully. The Company’s
investments may not, however, result in technologies, products and services or combinations thereof that achieve or retain broad or
timely market acceptance or which are preferred by application developers, content providers and customers or consumers. Market
reception to the BlackBerry PlayBook tablet, which launched in fiscal 2012, did not meet the Company’s expectations and, as noted
above, its BlackBerry PlayBook OS 2.0 software release was delayed until February 2012, which further impacted the adoption of the
BlackBerry PlayBook tablet. If the Company is not successful in competing in the tablet market, its business will continue to be
dependent on its BlackBerry smartphones. If that occurs, and if current trends in the tablet market continue, this could have a material
adverse effect on the Company’s future growth and prospects. In addition, the Company views adoption of the BlackBerry PlayBook
tablet, which uses the same QNX-based platform that will be, used in its BlackBerry 10 smartphones, as an important component of
its strategy to lay the groundwork for the launch of the BlackBerry 10 smartphones. Consequently, the Company’s inability to
compete in the tablet market or to drive adoption of the BlackBerry PlayBook tablet by its enterprise customers and consumers in
advance of the launch of the BlackBerry 10 smartphones may adversely affect the adoption and success of the BlackBerry 10
smartphones.
In addition, to the extent that the Company licenses its technology to enable other device manufacturers or software developers to
equip their products with BlackBerry functionality, including RIM’s push technology, or use the Company’s network infrastructure,
such action may have the effect of impacting demand for RIM’s products and services, and the benefits of such initiatives to the
Company through the generation of alternate sources of revenue may not be realized in the manner anticipated by the Company, or
may not offset the competitive impact such actions could have on the Company’s business.
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