Blackberry 2013 Annual Report Download - page 57

Most network carriers and distributors sell products and services of the Company’s competitors. If the Company’s competitors offer
their products and services to the carriers and distributors on more favorable contractual or business terms, have more products and
services available, or those products and services are, or are perceived to be, in higher demand by end users, or are more lucrative for
the carriers and distributors, there may be continued pressure on the Company to reduce the price of its products and services, or those
carriers and distributors may stop carrying the Company’s products or de-emphasize the sale of its products and services in favor of
the Company’s competitors, which would have a material adverse effect on the Company’s business, results of operations and
financial condition. There can be no assurance that the network carriers and distributors will act in a manner that will promote the
success of the Company’s products and services.
The Company has a number of significant customers and large complex contracts with respect to sales of the majority of its products
and services. Revenue from network carriers represented approximately 63% of revenue for fiscal 2013, compared to approximately
62% of revenue for fiscal 2012. If any significant customer discontinues its relationship with the Company for any reason, or reduces
or postpones current or expected purchase commitments for the Company’s products and services, it could have a material adverse
effect on the Company’s business, results of operations and financial condition. One customer comprised 8% of accounts receivable
as at March 2, 2013 (March 3, 2012 – one customer comprised 13%). There are no customers that comprise more than 10% of the
Company’s fiscal 2013 revenue (similar to fiscal 2012 revenue). The Company’s ability to replace or find new large customers is
necessarily limited due to the limited number of wireless carriers and distributors in many territories.
The Company, in the normal course of business, monitors the financial condition of its customers and reviews the credit history of
each new customer. The Company establishes an allowance for doubtful accounts intended to correspond to the specific credit risk of
its customers, historical
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• the pricing and terms of voice and data plans that carriers will offer for use with the BlackBerry wireless solution,
includin
g
an
y
subsid
y
p
ro
g
rams;
• sales growth of wireless devices, along with the related service, software and other revenues with respect to the BlackBerry
wireless solution;
• si
g
nificant numbers of new activations of BlackBerr
y
subscriber accounts, as well as retention of existin
g
ones;
• the carriers’ interest in testing, and certifying in a timely manner, the Company’s products, including tablet devices, on
their networks;
• network
p
erformance and re
q
uired investments in u
pg
rades;
• future investments in evolvin
g
network technolo
g
ies and su
pp
ort for new software technolo
g
ies; and
• continued support and distribution of the Company’s products and services if claims involving its products are filed against
its carriers and licensees as well as a
g
ainst the Com
p
an
y
.