Blackberry 2013 Annual Report Download - page 207

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Revenue
Revenue from continuing operations for the fourth quarter of fiscal 2013 was $2.7 billion, a decrease of approximately $1.5 billion, or
36.0%, from $4.2 billion in the fourth quarter of fiscal 2012.
Comparative breakdowns of the significant revenue categories are set forth in the following table:
Hardware revenue was $1.6 billion, or 61.2% of consolidated revenue, in the fourth quarter of fiscal 2013, compared to $2.9 billion,
or 68.5% of consolidated revenue, in the fourth quarter of fiscal 2012, representing a decrease of 42.8%. This decrease in hardware
revenue over the comparable prior fiscal year period was a result of decreased BlackBerry handheld device shipments due to the
Company’s aging product portfolio in a very competitive environment in which multiple competitors introduced new devices
beginning in early fiscal 2013, partially offset by the higher average selling prices of BlackBerry 10 devices. In the fourth quarter of
fiscal 2013, 6.0 million BlackBerry handheld devices were shipped, which decreased from 11.1 million in the same period in the prior
fiscal year due to a number of factors, primarily reflecting the ongoing market challenges, the intense competition the Company is
facing across many of its markets, particularly in the United States, as well as the platform and product transition the Company has
been undertaking. The Company introduced the first BlackBerry 10 smartphones into market in certain countries on January 31, 2013
in major centres such as Canada, the United Kingdom, South Africa, the United Arab Emirates and Indonesia, among others.
The number of BlackBerry PlayBook tablets shipped during the fourth quarter of fiscal 2013 was approximately 0.4 million,
representing decrease of 0.1 million units compared to the same period in the prior fiscal year. Overall, BlackBerry PlayBook tablet
shipments have experienced lower than anticipated sell-through to end users due mainly to intense competition in the tablet market,
especially in the United States. During the fourth quarter of fiscal 2013, the Company continued its ongoing promotional activities to
encourage sell-through of the BlackBerry PlayBook tablets. The Company sold out of the 16G BlackBerry PlayBook tablets in the
second quarter of fiscal 2013 and is continuing to sell its 32G and 64G units as well as the 3G plus BlackBerry PlayBook tablet and
4G LTE BlackBerry PlayBook tablet, which launched in the second quarter of fiscal 2013.
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For the Three Months Ended
March 2, 2013 March 3, 2012
Change Q4 Fiscal
2013/2012
Millions of BlackBerry handheld devices sold
6.0 11.1 (5.1) (45.9%)
Millions of BlackBerr
y
Pla
y
Book tablets sold
0.4 0.5 (0.1) (20.0%)
Revenue (in millions)
Hardware
$1,640 61.2% $2,866 68.5% $(1,226) (42.8%)
Service
947 35.4% 1,133 27.1% (186) (16.4%)
Software
63 2.4% 80 1.9% (17) (21.3%)
Other
28 1.0% 102 2.5% (74) (72.5%)
$2,678 100.0% $4,181 100.0% $(1,503) (35.9%)