Blackberry 2013 Annual Report Download - page 56

by Google, and the partnership of Microsoft and Nokia, are examples of such strategic relationships. Disruptions in the Company’s
business caused by these events could reduce revenue, result in a loss of market share, and adversely affect the Company’s business,
results of operations and financial condition.
The Company’s ability to compete successfully will also depend on its ability to control the costs associated with the development,
manufacture and marketing of new products. In order to drive demand for BlackBerry products and services in the United States prior
to and following the launch of the BlackBerry 10 smartphones, the Company continues to run a comprehensive marketing and
promotional program. There can be no assurance that such promotional activities will be successful.
The Company’s ability to sell the BlackBerry wireless solution is dependent on establishing and maintaining
relationships with network carriers and distributors.
The Company is dependent on its ability to establish, maintain and develop new relationships, and to build on existing relationships
with its network carrier partners, which the Company relies on to promote and deliver current and future products and services, and to
grow its subscriber base, particularly in the United States, Canada and Europe where the Company is dependent on a limited number
of network carriers. In addition, the Company’s ability to establish, maintain and expand its market reach is increasingly dependent on
establishing and maintaining distribution relationships with third party and indirect distributors. This is particularly the case in
emerging markets such as the Middle East, Asia and Latin America. There can be no assurance that the Company will be successful
in establishing new relationships, or maintaining or advancing its existing relationships, with network carriers or distributors. Non-
performance by the Company under its contracts with network carriers or distributors may have significant adverse consequences that
may involve penalties to be paid by the Company for non-performance. If any significant customer discontinues its relationship with
the Company for any reason, or reduces or postpones current or expected purchase commitments for products and services, the
Company’s business, results of operations and financial condition could be materially adversely affected.
Factors, some of which are largely within the control of network carriers and distributors, that are important to the success of the
BlackBerry wireless solution, future product and service revenue and the growth of the Company’s subscriber base, include:
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• the
q
ualit
y
and covera
g
e area of voice and data services offered b
y
the carriers;
• the degree to which carriers and distributors actively promote or subsidize the Company’s products and the size of the
subscriber base to which these efforts are directed;
• the extent to which carriers and distributors offer and
p
romote com
p
etitive
p
roducts and services;
• the continued generation of service revenues from billings to BlackBerry subscribers from infrastructure access fees that
are charged to a carrier or reseller, which the carrier or reseller in turn bills to the BlackBerry subscriber, and the
willin
g
ness of the carriers to
p
a
y
such fees;