Blackberry 2013 Annual Report Download - page 193

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Revenues in Europe, Middle East and Africa were $4.5 billion or 40.7% of consolidated revenue in fiscal 2013, reflecting a decrease
of $3.2 billion compared to $7.7 billion or 41.6% of consolidated revenue in fiscal 2012. The Company’s largest market in this
region, the United Kingdom, represented approximately 11% of total consolidated revenue, an increase of 1% from fiscal 2012. The
United Kingdom was also the first country to introduce the Company’s BlackBerry 10 smartphones into market on January 31, 2013.
Some of the larger markets comprising this region include South Africa, France and United Arab Emirates. Subscriber accounts in
Europe, Middle East and Africa have remained stable, marginally increasing by 1% since the end of fiscal 2012. In addition to the
United Kingdom, the Company has launched the BlackBerry Z10 in many countries in this region in the fourth quarter of fiscal 2013
including South Africa, Nigeria, France, Germany, Italy, Spain, Turkey, Switzerland, Kuwait, United Arab Emirates, Lebanon, Iraq
and Pakistan and will continue to launch BlackBerry 10 devices in additional countries in the first and second quarters of fiscal 2014.
Revenues in Latin America were $2.1 billion or 19.1% of consolidated revenue in fiscal 2013, reflecting a decrease of $532 million
compared to $2.6 billion or 14.4% of consolidated revenue in fiscal 2012. Some of the larger markets comprising this region include
Venezuela and Mexico. Subscriber accounts in Latin America have increased by 17% since fiscal 2012. The Company launched its
first BlackBerry 10 devices in the region in Mexico on March 23, 2013.
Revenues in Asia Pacific were $1.6 billion or 14.0% of consolidated revenue in fiscal 2013, reflecting a decrease of $1.1 billion
compared to $2.7 billion or 14.5% of consolidated revenue in fiscal 2012. Some of the larger markets comprising this region include
Indonesia and India. Subscriber accounts in Asia Pacific have increased by 36% since the end of fiscal 2012. In the fourth quarter of
fiscal 2013, the Company has launched the BlackBerry Z10 in many countries in this region including Indonesia, India, Malaysia and
Singapore and will continue to launch BlackBerry 10 devices in additional countries in the first and second quarters of fiscal 2014.
Gross Margin
Consolidated gross margin from continuing operations decreased by $3.1 billion, to $3.4 billion, or 31.0% of consolidated revenue, in
fiscal 2013, compared to $6.6 billion, or 35.7% of consolidated revenue, in fiscal 2012. Excluding the impact of charges related to the
CORE program incurred in fiscal 2013, of which $96 million was attributable to cost of sales, and the impacts of the PlayBook
Inventory Provision, BlackBerry 7 Inventory Provision, the Q3 Service Interruption and charges related to the Company’s previous
cost optimization program, of which $14 million were attributable to cost of sales, that were incurred in fiscal 2012, gross margin
decreased by $3.9 billion.
The $3.9 billion decrease in consolidated gross margin was primarily attributable to the lower volume of BlackBerry handheld
devices shipped as a result of the Company’s aging product portfolio in a very competitive environment in which multiple
competitors introduced new devices beginning in early fiscal 2013
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