Blackberry 2013 Annual Report Download - page 171

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Company’s ability to innovate and deliver compelling products to market. In June 2011, the Company also participated in a
successful bid for the Nortel Networks Corporation (“Nortel”) patent portfolio as a part of a consortium of companies. The Nortel
patents obtained eliminated the Company’s exposure to those patents and are expected to strengthen the Company’s patent portfolio
and its position in respect of patent litigation and licensing.
Operational and Strategic Review
The Company is in the ongoing process of completing the largest platform and organizational transition in its history, with a view to
better position the Company to achieve growth and to continue to be a leading company in the wireless communications industry. The
Company’s fiscal 2013 results reflect the product and platform transition underway, ongoing market challenges and the competitive
dynamics across many markets. As part of its ongoing efforts, the Company has continued its operational and strategic review, which
includes re-evaluating its product portfolio, operations, manufacturing and research and development strategy. In fiscal 2013, the
Company implemented various initiatives as part of its operational and strategic review, and has now substantially completed its
anticipated headcount reductions previously announced in an effort to align the Company’s cost structure to enable it to move through
this transition and deliver on long-term stakeholder value. J.P. Morgan Securities LLC and RBC Capital Markets continue to act for
the Company in reviewing the Company’s business and financial performance. They have been tasked with helping the Company
with its operational and strategic review and evaluating the relative merits and feasibility of various financial strategies, including
opportunities to leverage the BlackBerry platform through partnerships, licensing opportunities and strategic business model
alternatives. During fiscal 2013, the Company also implemented major changes throughout the organization, which it believes have
made the Company leaner and more nimble and are intended to provide a solid foundation for continued innovation and execution.
Sources of Revenue
The Company’s primary revenue stream is generated by the BlackBerry wireless solution, which includes sales of BlackBerry
handheld devices and BlackBerry PlayBook tablets, services and software. The BlackBerry wireless solution provides users with a
wireless extension of their work and personal email accounts, including Microsoft Outlook , IBM Lotus Notes , Novell
GroupWise and many ISP email services.
The Company generates hardware revenues from sales, primarily to carriers and distributors, of BlackBerry handheld devices, which
provide users with the ability to send and receive wireless messages and data. The Company’s BlackBerry handheld devices also
incorporate a mobile phone, web-browsing and multimedia capabilities and enable the use of data functions such as calendar, address
book, task and memo lists and other functions associated with personal organizers. During fiscal 2013, the Company continued to
launch new BlackBerry handheld devices that incorporate the BlackBerry 7 operating system as well as continuing major BlackBerry
7 upgrade programs in Canada, the United States and the United Kingdom. As part of the Company’s ongoing operational and
strategic review, the Company intends to streamline the BlackBerry smartphone product portfolio to offer a smaller number of
devices in market at any given time. The successful launch and customer adoption of the Company’s next-generation BlackBerry 10
platform and the delivery of high quality, full-featured BlackBerry 10 smartphones remain the Company’s number one priority. The
Company held the official BlackBerry 10 launch event on January 30, 2013, and the first BlackBerry 10 smartphones were introduced
into the market on January 31, 2013 in the United Kingdom and February 5, 2013 in Canada. More recently, the Company launched
the BlackBerry Z10 smartphone in the United States with AT&T on March 22, 2013 and with T-Mobile and Verizon soon thereafter.
The Company also announced that the BlackBerry Q10 smartphone will be launched in international markets beginning in April
2013.
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