BlackBerry Ltd (BB) 2003 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Research In Motion first quarter fiscal 2003 earnings conference call. At this time all participants are in a listen-only mode. Following the presentation we will conduct a question-and-answer session. Instructions will be provided at that time should you have questions.

If anyone has any difficulties during the conference, please press star zero for operator assistance at any time. I would like to advise everyone that this conference call is being recorded and will now turn the conference over to Mr. Dennis Kavelman, Chief Financial Officer. Please go ahead, sir.

Thank you. Welcome to RIM's fiscal 2003 first quarter conference call. With me is Jim Balsillie, RIM chairman and co-CEO. After reading the required forward-looking statements disclaimer I will begin by providing an overview of first quarter results as well as guidance for upcoming quarters. I will then turn the call over to Jim who will provide business and strategic updates. We will then open up the call for questions.

I would like to note that this call is available to the general public via call in number and web cast. A replay of the webcast will also be available on the RIM.net website. We will be wrapping up the call by 6:15 Eastern this evening.

Information presented today includes forward-looking statements within the meaning of the United States private securities litigation reform act of 1995. These includes statements about our expectations, beliefs, intention or strategies for the future which we indicate by words such as anticipate, intend, believe, forecast, expect, estimate, and similar words.

Our forward-looking statements reflect our current views with respect to future events and are subject certain risks and certain assumptions we have made. The important factors that could cause our actual results a, performance, or achievements to be materially different than those express or implied by these forward-looking statements include continued acceptance of RIM's products, RIM's competition, rapid technological change, timing of rollouts and new network technologies, changes in the macroeconomic environment, dependence on intellectual property rights, dependence on the success of carriers and distribution partners, risks relating to product defects and product liability, risks relating to foreign exchange fluctuations, change in Canadian laws and foreign relations, risks relating to international operations, and other risks detailed from time to time in RIM's periodic reports filed with the securities and exchange commission and other regulatory authorities. If one or more of these risks or uncertainties materialize or assumptions underlying the forward-looking statements prove incorrect, actual results could vary materially from those that are express or implied by these forward-looking statements. We base our forward-looking statements and material currently available to us. We do not assume any obligation to update them.

I would now like to provide an overview of the first quarter results. Revenue for the first quarter ending June 1st was $71.6 million. This represented an increase of 8 percent over the $66.1 million in the prior quarter and 7 percent decrease from $77 million in the first quarter of last year. Now, the BlackBerry represents the vast majority of RIM's revenue, we will report revenue segmented into handheld hardware, service and software, OEM and other.

Total handheld represented $28.1 million or 39 percent of RIM's revenue during the quarter. This was up from $27 million in the prior quarter. We shipped approximately 63,000 handhelds, combined BlackBerry and nonBlackBerry, nonBlackBerry handhelds representing just 3 percent of total revenue. ASPs were 445 dollars, up from 380 in the prior quarter. ASPs in Q4 were low due to a greater percent of shipments in the 950 form factored into that quarter. In Q1 the mix was a majority of 857, 957, and GPRS handhelds which have higher ASPs Nonhydrorevenue (phonetic) which includes service and software was $38.2 million or 54 percent of revenue for the quarter. The service component was $29.4 million with a remaining $8.8 million being split between enterprise software revenue and software NREs paid from carriers and other partners from BlackBerry development.

RIM added 60,000 gross subscribers during the quarter steady with Q4 gross additions. Deactivations were lower than the previous quarter at 26,000 for total net subscriber additions of 34,000 and total BlackBerry subscribers of 355,000 as of June 1st.

6,100 companies have installed the BlackBerry enterprise server in their organization up from 5,000 at the end of February. From this point we will just disclose the number of enterprises with BlackBerry service enterprise server software as it is a more meaningful metric than total companies using BlackBerry.

Sales of OEM radios and other revenues such as accessories was $5.3 million for 7 percent of revenue for the quarter. Gross margin for the first quarter was up to 43.5 percent versus 42.1 percent in the prior quarter and 38.1 percent for the same quarter a year ago. This increase was expected, gross margin continues to increase with a greater percentage of service and software revenue and with ongoing cost reduction to hardware products..

Gross R and D spending increased $16.2 million for the quarter as expected versus a $14.8 million in the prior quarter. The majority of this expense was direct personnel express so prototyping materials and other costs for initiatives such as GPRS, CDMA, and new odd end products.

RIM continues to hire selectively and is committed to investing in necessary projects with the best opportunities for long-term returns. R and D expenditures and other government funding for the quarter were $12.6 million or 17.6 percent of revenue.

Selling marketing and administrative expenses were $28 million. This is higher than the $26.6 million spent in the prior quarter but lower than the forecasted increase. While we continue to invest heavily for new carrier products, brand awareness and global expansion, we're managing costs very tightly and believe the lower than expected SG and A expenses this quarter is evidence of the successful cost management efforts.

Depreciation and amortization was $7.2 million, up from $5.8 million in the prior quarter. The increase was related to the acquisition of R and D production equipment as well as to a write down of tooling and NRE costs for some legacy products.

Net income in the first quarter was $3.2 million. The decrease from $4.3 million in the prior quarter was due to lower interest rates as discussed in a previous conference call so the decrease in cash, cash equivalent to marketable securities, $28.6 million. Net loss for the quarter was $10.8 million or 14 cents per share. This is favorable versus our guided range of 18 to 22 cents per share due to mainly stronger growth margins and prudent cost management.

RIM's balance sheet continues to be very strong with high cash reserves, negligible long-term debt and appropriate working capital balances. Cash, cash equivalents and marketable securities, at the end of the first quarter RIM had $616 million in cash, which is $7.88 cents per U.S. share, a decrease of $38.6 million from the prior quarter. Cash holds from operation was positive at $6.1 million due to strong efforts in accounts receivable and inventory management. Acquisition of capital and tangible assets equaled $24.7 million. This included assets for the plant, R and D programs, new sales offices as well as licensing fees to several technology partners.

RIM also purchased 685,000 shares under the terms of the normal course issuer bid at a cost of $10.1 million. We are modeling a cash burn for the second quarter of approximately $40 million excluding any share repurchases. This is higher than the first quarter due to license fees paid under the announced agreement with Ericsson as well as the slang soft (phonetic) acquisition. We expect cash burn to the $20 to $30 million in the third quarter and approximately $20 million in the first quarter as we move to profitability.

RIM's cap-ex budget has remained at $80 million for the year but incremental spending is being directed to the IT licensing programs such as the deal announced with Ericsson.

Trade accounts receivable increased slightly to $43.3 million from $42.6 million in the prior quarter. Trade DSOs for Q1 decreased to 55 days compared to 59 days in the previous quarter. Other receivables decreased to $2.44 million in the first quarter down from $6 million in the prior quarter. Other receivables primarily relate to government R and D programs and Canadian and UK sales taxes.

Inventory decreased to $29.3 million in the current quarter down $8.2 million from $37.5 million in the prior quarter. The majority of RIM's inventory continues to be raw materials components. The inventory balance has been steadily decreasing as legacy raw materials are reduced.

Net capital in the tangible assets increased by $17.4 million in the first quarter to 199.6 million. Increase was due to the acquisition of capital assets and intangible assets with regard to profitability, R and D, production related assets and licenses. Accounts payable and accrued liabilities increased slightly to $49.2 million from $46.9 million at the end of the first quarter. Deferred revenue increased to $11.6 million up $1.8 million from $9.8 million at the end of last quarter as a direct result from continuing growth in the company's BlackBerry subscriber base. Deferred revenue continues to be primarily comprised of prepaid customer air time usage fees for BlackBerry internet addition, deferred licensing revenues, and deferred warranty payments.

Weighted average shares used in the EPS calculation for the quarter were $78.7 million. Actual basic and diluted securities outstanding on June 1st were $78.2 million and $88.7 million, respectively. During the quarter the company repurchased of 685,000 of its common shares for a total cost of $10.1 million pursuant to the common share purchase plan.

At this time I would like to discuss our outlook for the upcoming several quarters. I'll provide a financial outline and Jim will expand upon the individual products and channels. Again, a reminder that these forward looking statement reflect management's best current estimates and should be taken in the context of the risk factors outlined at the beginning of the call and outlined in our regular filings.

On the April conference call we provide add revenue estimate for the August quarter in the range of $75 to $80 million. We continue to expect revenue in this range. We are continuing to model a steep increase in revenue in the second half of the year as most of our European, North American and Asian carrier partners and channels will have successfully launched their BlackBerry offerings, a new handheld with integrated speaker microphone and world band capabilities will also have launched. With respect to the third quarter ending in November, we are targeting revenue in the range of $90 to $100 million. This is currently in line with consensus forecast. On the last call we provided an estimated range of $375 to $425 million in revenue for the year. Current street consensus is in the range of $340 to $360 million due to concerns over the timing of carrier rollouts, telecom spending and enterprise spending. We continue to believe that the lower end of our guided change is reasonable and attainable based on the outlook for Q2 and Q3. We do not have clear visibility after the fourth quarter so we are conservatively estimating a $350 to $375 million range for revenue for the year. Based on booked orders, supply agreements, new product launches and ongoing service and software revenue, we feel this range is reasonable and attainable.

Gross margin increased in Q1 to 43.5 percent. This is in line with our expectations for this quarter of between 42 and 45 percent. This increase in gross margin is due to the increase in amount of software and recurring license and service fees in our revenue mix as well as ongoing cost reduction efforts for our handheld products. We expect this trend to continue and are raising our gross margin target to the 45 to 48 percent range.

With respect to operating expenses, as evidenced by a lower than expected expense levels in the first quarter, we are tightly controlling costs even as we aggressively roll up new carrier partners and new products. We are targeting net R and D expenses to increase by approximately 20 to 25 percent in Q2 due to some development expenses scheduled to specifically land in this quarter and then to remain steady growing less than 10 percent per quarter going forward.

We continue to see longer term leverage and R and D, and look for it to drop substantially as a percentage of revenue by the fourth quarter of next fiscal year. We expect SG and A to increase by 15 to 20 percent in the second quarter from the $28 million in Q1 and then at a rate of approximately 5 to 10 percent per quarter going forward.

Marketing expenses will vary depending on the number of new markets and new channel partners being launched and supported. With respect to depreciation and amortization, there's a few one time write downs increase depreciation expense this quarter we forecast depreciation expense to be flat in the second quarter and then to increase 10 to 15 percent per quarter thereafter.

Given the low short term interest rates in the U.S. we are currently modeling annualized yields on our portfolio for approximately 2 percent for Q2, total investment income the second quarter would therefore be in the range of $3 to $3.5 million. People should continue to adjust their models with movements and rates. We are currently forecasting a tax rate of 20 percent for fiscal 2003 and a long term rate of 25 to 30 percent.

With respect to earnings, we now expect the net loss for the second quarter to be in the range of 15 to 20 cents which is improved from the previously expected loss of 18 to 22 cents. The main reason for this decrease is improved gross margins as well as tight management of expenses of our current estimate for the third quarter is a smaller loss in the range of 7 to 12 cents per share. Based on the current forecast of for the year of $350 to $375 million in revenue, we are continuing to forecast a return to profitability in the fourth quarter with an overall loss for the area of 30 to 45 cents per share. I will now turn the call over to Jim.

Thank you very much, Dennis. I'm clearly pleased that we achieved our forecasted revenue target, improved upon our net loss forecast for the first quarter by controlling costs. Our traffic continues to be to leverage all the exciting deals we've announced into strong subscriber and revenue growth. There continues to be strong demand for BlackBerry as evidenced by the 60,000 growth subscriber ad during the quarter, and an exciting number of new channel partners globally upon which we base our growth plans.

Last quarter we conservatively reduced our revenue estimates for the first - for the fiscal year due to timing concerns regarding carrier rollouts. Our expectations for the remainder of this year have not substantially changed, as Dennis discussed a few moments ago. From a partnership and deal perspective, we have had an extremely successful few months since our April conference call. New carrier deals were announced with Vodafone UK, SFR in France and with Telstra in Australia. AT and T Wireless, Rogers, Hutchison in Hong Kong T-Mobile in Germany and TIM in Italy all announced commercial availability of BlackBerry. Last week we announced a BlackBerry product roll back that many include a world band handheld with integrated speaker mic and removable rechargeable battery, multinetwork support for customers to support mixed environments, advanced IT management features, mobile data service, BlackBerry web clients as well as additional features such as tri-ban support, color screen, corporate voice mail integration and additional wireless synchronization features.

Following the announcement of the new GPRS OEM product line, we announced supply agreements with Melard Technologies and Panasonic. In the next few minutes I would like to talk about these new relationships and announcements and will provide updates on our assisting channel partners as well as our internal operations.

I will now provide an update on BlackBerry. At the end of the quarter we had 355,000 subscribers. Over 6,100 companies have installed the BlackBerry enterprise server. Net subscriber ads of 34,000 were up slightly from the February quarter and in line with expectations between 30,000 and 40,000. Growth subscriber ads continue to be strong at 60,000. Obviously the downsizing that we saw in the fourth quarter continues in the first quarter as well. For the second quarter we are again conservatively targeting 35,000 to 45,000 net additions. We look for gross additions to increase from Q1 and are working to control deactivations. We expect significantly higher gross and net subscriber additions in the third and fourth quarter of this year.

I will now provide an update on our care relationships. In Europe, our European team continues to work with closely with MMO2 property to drive subscriber additions over their network. The quality and of service in the UK and across their properties is very high and roaming is improving quickly. We are working on several new programs for the remainder of the summer and the fall. An agreement was announced with Vodafone on April 15th to launch BlackBerry this summer to Vodafone's UK corporate customers. Vodafone's cited RIM's proven track record of success and well established BlackBerry solution as the reasons for working with RIM. Vodafone has announced GPRS roaming capability across 14 European countries so BlackBerry users will be able to maintain their link to the corporate information when traveling. We are extremely bullish about Vodafone's prospects in driving significant BlackBerry sales in the UK and the rest of Europe.

On May 13, Telecom Italia Mobile announced commercial availability for BlackBerry in Italy. TIM has already experienced a very positive response from major Italian corporations that have participated in trials of BlackBerry solution. Both TIM and RIM will be working with wireless solutions, a subsidiary of DADA, on the development of additional corporate applications for the Java-based BlackBerry platform as well as on systems integration for the solution. With $24 million domestic subscribers we expect TIM to be a very significant partner for RIM in Europe.

On June 12T-mobile announced commercial availability of the BlackBerry 5820 complete with voice capability for enterprise customers in Germany. They also announce that they plan to make BlackBerry available through affiliated customers in other countries by the end of the year.

Last Friday RIM announced a relationship with SFR to distribute BlackBerry in France. More details on the French availability for BlackBerry will follow when appropriate..

We continue to work closely with other carriers in Europe and will announce these relationships when appropriate.

In North America, last week AWS commercially launched BlackBerry service over GPRS network. Services currently available in several metropolitan area include Chicago, Seattle, portland, San Diego, Sacramento, Dallas, Phoenix, Detroit, Denver, and Orlando as well as roaming agreements with other carriers throughout North America. All global account managers and data account managers coverage areas will be selling BlackBerry.

Voice Stream launched BlackBerry on May 12 and has made significant progress since that time. Voice Stream and RIM have made many updates to the network and to device software over the past three months. The service is now fast and reliable. Voice Stream now offers GPRS coverage to over 75 percent of the of the populated U.S. through T-Mobile, U.S. customers can roam with a 5820 while in the UK, Germany, and Australia. Voice Stream has a dedicated sales and support organization that focusses on enterprise customers. Soon BlackBerry will be marketed by all Voice Stream channels.

Last week Nextel announced further details regarding an upcoming BlackBerry offering. The Nextel BlackBerry will include integrated speaker, microphone, digital walkie talkie service, paging, Nextel wireless web on line services as well as traditional BlackBerry features. We will also have a removable rechargeable battery and an external antenna for enhanced in building coverage. The Nextel BlackBerry is scheduled for release in the calendar fourth quarter of this year.

We've been working closely with Cingular and trialing GPRS BlackBerry in several dozen of their large customer accounts with the 5810. The reaction has been extremely positive and we expect Cingular to leverage their mobile text experience with BlackBerry into a very strong GPRS BlackBerry offering on the Cingular network.

We continue to work closely with other major GSM and CDMA carriers in the U.S. and will provide the details of these relationships as agreements are finalized. In Asia on May 6, Hutchison telecommunications announced commercial availability of BlackBerry over Hutchison's Orange Network in Hong Kong. Hutchison Telecom is the first mobile operator in Asia to offer BlackBerry. Hutchison also announced Macau and Mainland China are the next targets for BlackBerry. Hutchison and RIM will also work together to develop 3G applications and to extend BlackBerry to 3G markets worldwide.

On May 30th, Telstra and RIM announced an agreement to bring BlackBerry to Australia. Telstra has already commenced acceptance testing, initial pilots in June and expects to roll out commercially in upcoming months.

Now for a mobile text (phonetic) and data text (phonetic) update. Cingular continues to sign up a significant number of BlackBerry subscribers. Over the next few quarters we expect end user demand for handhelds using mobile text remain relatively steady as nationwide coverage and good service quality remain key customer purchasing criteria. Specifically many government users are expected to utilize the noble text network. We are also using closely with Cingular in their G press plans and expect to leverage this long standing relationship as they launch G press service later this year.

Rogers AT and T also continues to sell mobile text products in Canada and our expectations for the Canadian market are also for mobile text sales to continue to have success and to target verticals due to the quality of service and coverage advantages.

Motion came out of chapter 11 following our last conference call and we are working closely with them to continue to successfully deploy BlackBerry over there nationwide data tech network.

But for the BlackBerry road map announcement, last week RIM showcased the latest hardware, software, and services available for the BlackBerry platform, and outright plans for taking enterprise customers to the next level in wireless.

RIM demonstrated a new BlackBerry handheld which included world band capabilities as well as an integrated speaker, microphone, and removable rechargeable battery. This world band BlackBerry handheld is currently expected to be available in the fall.

RIM also announced that the BlackBerry for CDMA/1xRTT network is currently expected later this year and will also feature integrated speaker, microphone, and removable rechargeable battery.

BlackBerry enterprise server will support multiple wireless network standards including mobile tech, data tech, GSM/GPRS, iDEN, and CDMA/1xRTT, allowing customers to support mixed environments and enabling current customers to support new BlackBerry handhelds without changing their back end infrastructure.

Incorporating feedback from customers that have deployed wireless enterprise solutions broadly RIM is adding new features to help IT departments manage BlackBerry deployments more effectively. IT administrators will have the ability to push software to their user's PCs and set end user policies wirelessly. New security features will enable IT departments to wirelessly disable and erase all data and a BlackBerry handheld and remotely or change the user's password.

IT administrators will be able to implement and wirelessly push group policies to BlackBerry users without the need for users to cradle their handhelds. These new features are expected to be supported this fall for Microsoft Exchange and this winter for Lotus Domino.

The new mobile data service of the BlackBerry enterprise server will enable always on push access to enterprise applications and information using the BlackBerry handheld browser and software development tools. By leveraging the BlackBerry infrastructure with which supports multiple networks using standard protocols and languages including XML, HTTP, and Java, corporate application developers and ISVs can quickly deploy wireless applications without learning new middle ware or operating systems.

RIM developed a new web based application called BlackBerry web client. This will allow users to access multiple existing e-mail accounts including ISP accounts from a single BlackBerry handheld through the potsry (phonetic) protocol and/or mail forwarding. In addition, a default web mail account is provided with each handheld.

Several carriers are testing BlackBerry web client which is expected to be available later this year. RIM also provided some insights to features under development for BlackBerry including tri-ban support, color screen, corporate voice mail integration and additional wireless synchronization features. RIM continues to build strong alliances with leading IT suppliers such as Microsoft, IBM, Sun, BEA, Computer Associates, NetIQ, Compaq-P, Xerox, Cognos, and FAP to develop and deliver a broad range of range of wireless enterprise solutions. RIM also partners with ISPs and systems integrators to develop vertical focus applications for industries such as legal, financial, construction, and healthcare.

Now for the OEM radio update. On May 1 RIM announced the first two supply agreements for the new family of GPRS OEM radios. Melard has selected RIM OEM radios to wirelessly enable its rugged handheld computers. The target market for these products are mobile employees and the teleco cable service field service and utilities industries. Melard valued RIM's wireless solution as it has already been tested, proven, and successfully deployed.

Panasonic announced plans to integrate RIM's GPRS radio modems into their line of Toughbook ruggedized portable computers targeted to mobile professionals in vertical industries including government, field service, and sales, utility, telecommunication, insurance, transportation, [inaudible] and military. RIM and Panasonic have an extensive relationship beginning in 1998 with the CF25 Toughbook.

On the intellectual property front, on June 19th, RIM and Ericsson entered into a license agreement under which RIM was granted a nonexclusive license under Ericsson's patent portfolio for the GSM/GPRS, edge, and CDMA2000 standards. This allows RIM to develop, manufacturer, and sell products globally using Ericsson technology in these areas. In return, RIM provides royalty payments and a reciprocal patent cross license to Ericsson.

Also on June 19th, RIM filed a complaint against Good Technology, the complaint alleges that Good Technology wireless goods and service infringe upon four RIM patents within RIM's wireless integration portfolio. RIM is asking the Court for an injunction and an award of monetary damages. In addition RIM asserts that good technology's infringement is willful, thus allowing the Court to award enhanced monetary damages for Good Technology's infringements as well as attorney's fees and costs to RIM. RIM continues its review of Good Technology's goods and services to determine whether any other rights are violated.

In acquisitions, in June RIM acquired the assets of Flaingsought (phonetic) Incorporated for $8 million. Flaingsought has a comprehensive intelligent Tex input and display platform written in both C plus plus (phonetic) and mid-P Java, which is designed for small footprint devices. This platform includes a text input engine to support all major Chinese, Japanese, and Korean input methods and a font rendering engine to render Asian fonts. This font engine will also drive exceptionally sharp text display on future color displays.

In addition to the technology, RIM sought Flaingsought CEO and developers who have been relocated to Waterloo from Boston and Israel.

I will now provide an update on RIM's internal operations. At the end of May RIM's head count was approximately 2000. We continued to hire selectively across different groups of the organization, focusing on research and development as well as sales and marketing support for new carrier partners. A large part of the R and D group is dedicated to working with our carrier partners to prepare to offer them the BlackBerry service. We also have the teams in place to support the new reference design and licensing program. We continue to work on the development of the new iDEN BlackBerry handheld for Nextel and are on track with established milestones.

Our ongoing efforts in R and D are expected to yield new innovations and new developments in hardware products such as a 6700 product platform announced last week, the BlackBerry software platform, and new reference design and licensing programs.

In the sales and marketing, the sales and marketing team continues to focus on outing subscribers and supporting new challenging partners. Despite the issues in the telecom industry and the tight enterprise spending environment, our sales marketing cares for (phonetic) teams have succeeded in maintaining strong subscriber additions and expanding the BlackBerry brand globally.

We expect all of the investment in these carriers and reseller programs to reach significant dividends in the second half of the year. Significant marketing programs by our North American carrier partners should be very visible over the next few months. Our European team is extremely busy supporting new carrier launches and the Asian team is operational in Hong Kong and Australia.

In the administration and information technology, the majority of RIM's IT focus during the quarter continues to be directed toward connecting, testing with new carrier partners in North America, Europe, and Asia. Many new carrier connections were established during the last quarter. Projects during the quarter include - included improving redundancy, site to site failover capability for the Waterloo upgrades and BlackBerry relay hardware and software, improvements in the BlackBerry notification system to facilitate additional carriers and networks and to enable automated relay performance. Internal projects focused on continued improvement to the SAP system and improved customer care systems.

In summary, I feel we once again executed performed well both financially and operationally in the past quarter. We continue to deliver on our commitment to sign up carrier partnerships on a global base, continue to work with other carriers in North American, Europe, and Asia and will report the progress of these relationships as they mature. While the carrier deals are important, it is now crucial that we execute well with these carriers to drive sales through and subscriber growth over their networks. RIM's target growth in the second half of this year is very achievable and depends on our ability to make our carrier partners successful.

The most important metrics for our stakeholders to monitor as we go forward are the service launches for BlackBerry by our care partners and subscriber growth on these new networks. The fundamentals of our strategy continue to strengthen.

We're in discussions with several potential partners under the new reference designed and licensing programs and we'll announce details on new relationships as deals are completed. BlackBerry continues to be the premier brand for wireless enterprise data, the demand for wireless data continues to be strong and we continue to have a very bullish outlook on our new relationships with carriers in mortgage America, Europe and Asia.

I would like to remind everyone that we're going to end the call by 6 15 p.m. This concludes the formal comments, if the operator would please commence on to handle questions.

Thank you. One moment, please. Ladies and gentlemen, we will now conduct the question-and-answer session. If you have a question, please press the star followed by the one on your touch tone phone. You will hear a tone acknowledging your request. Your questions will be polled in the order they are received. If you'd like to decline from the polling process, please press star followed by the two. Please ensure you lift the handset if using a speakerphone before pressing any keys. One moment, please, for the first question.

The first question comes from Rob Sanderson of Banc of America. Please go ahead.

Thank you. Congratulations, guys, solid execution and positive development, tough environment. A few questions. Jim, if we could dig in a little more on the topic of intellectual property, first on Ericsson. It's sort of curious, we haven't seen, you know, other radio announcers making similar announcements of the agreement with Ericsson, is this sort of assist with development [inaudible] or is this a market requirement off of the text products?

And that's - okay. On that one, no, there's large amounts of essential IPR and essential intellectual property agreements that are needed to make a GSM/GPRS module or device and you must get these licenses with the major players in order to supply products into this market, and anyone who wants to be in this market must get these rights. Major players have to put it mildly, substantial intellectual property portfolios and they justly want their intellectual property protected or to collect a return for it. This is a fact of life. And we have a very experienced team that used to do this previously or one of the large device holders and we know this game.

So you know, making this comment it sounds like there's probably a whole lot of people that are potentially if violation of some of these essential copyrights.

I'm not going to comment, but because I don't know the nature of their deals, but, you know, there's no way that these companies would allow somebody to sell products without licenses. It's the standard in the GSM business, it's the standard in the GPRS business, whether you're in a device company or module company, and we have every intention of respecting the intellectual properties of these very established players.

Could you comment, then, on the reciprocal license, comment on that a little bit, what technologies of RIMs does this include.

I mean, I'm not going to go into it in great detail, but there's elements of cross licensing that goes into these and fundamentally what it does is stands for the basis of essential IDR and sort of core aspects of making the GSM/GPRS radio. There's commercial relationship and between the two companies that involve, you know, appropriate commercial compensation and obviously, you know, appropriate licenses so there's not assertions of intellectual property rights between the two players. But it's, you know, defined within the context of the radio, the GSM/GPRS device.

Okay. I guess under the topic of IPR with the [inaudible] was good, what are the next steps towards the restitution here and is it too early to really get a sense of time line or can you comment on what we should be expecting for timeliness?

When you look at this stuff, it's intellectual property rights, they're very material and important part of what we do and we deal with them very regularly and fairly and fundamentally if someone wants to do what we do, where we have a patent on it they need a license and it's just that simple and really these things go before the Court and they're, you know, they're within a legal process. This is something we're very experienced in. We have a very substantial team both internally and externally and it will follow its due process. I can't comment on it right now a great deal, Rob.

Okay. Thanks. Maybe one follow-up for Dennis, software and nonrecurring development, was pretty strong again this quarter. Can you give us a sense of how much was the nonrecurring piece? You know, that seems it could be a pretty lumpy stream, so can you give us a sense of how we should be looking at that one going forward?

Well, there's the base offer component for the event sales and support, continues to grow fairly steadily. We do get NREs from some of the carrier partners to develop new product, that's going to continue for the next several quarters. I would say more than half of the $8.8 million was related to ongoing [inaudible] sales and revenue.

Okay. So then is that sort of a, you know, do you expect to recognize more of the NREs or every quarter flattish or is that going to be lumpy?

Well, as you know, we've had [inaudible] of NREs for the last four or five years. Sometimes it is a bit lumpy, you get it in one quarter and not in another. I would say we see NREs will be continued to be recognized over the next several quarters and then after that we're always working on new programs, et cetera. So certainly for the next several quarters it will continue, but in the mean tile the underlying base software business continues to grow as well.

Sounds good, guys. Thanks.

The next question comes from Jeffrey Schlesinger, UBS Warburg. Please go ahead.

Thank you. Dennis, can you give us the mobile text versus nonmobile text hardware shipments on the border and also on the gross edition, what the mix was geographically?

Jeff, we haven't provided a breakdown of mobile text versus GPRS. Obviously it's going to continue to swing more towards more GPRS as we go forward, but that's not a piece of information that we have disclosed. On a geographic basis, obviously the vast majority of the sub ads continues to be in North America. Europe is growing and Asia just launched, so it's just beginning. So it's definitely a vast majority of North America.

Can you give us a sense and based on your predictions and the numbers you gave going forward, what would you expect that European ramp is going to give us? How do you expect that's going?

And also at the analyst meeting we talked about a big upgrade cycle from mobile text to these GSM/GPRS products and we, you know, the numbers were talked about like 100,000 of the 300,000 small brace at a time. What's your thinking on that upgrade process now given essentially what you know, essentially 90 days in the last quarter?

I won't go into specifics on your question. Obviously we have some pretty solid targets in Europe as the roaming issues get sorted out, that works much better in the 5820 and thin this fall with the 6720 launching with the integrated speaker mic. I'm not going to go into specific details, but certainly Europe will become a more significant percentage of overall revenues. With respect to the number of mobile tech customers that are going to turn or upgrade into GPRS, I don't think our view on that has changed. I think that once the coverage and the user experience is very strong as it's becoming as all the roaming agreements are in place so you can use GPRS anywhere in North America and cross border with Canada, et cetera, I think it's very reasonable to assume that a lot of people are going to move to these new networks.

And last question, if I could, on the extension of the BES server beyond obvious e-mail application to support other enterprise applications, can you give us a sense of any developments there, post BEA deal, anything more concrete since the analysts' meeting? Thank you.

Well, this is Jim Balsillie. I mean, clearly the - the new BES is in test or developed to and integrated in Beta tests with a number of places right now. Fundamentally, what it gives you, as you know, is security, HTTP so you get that triple link, and it supports HTTP and XML. So what it does for all those on the call is a very simple plug-in of existing corporate ops and they come to your handheld phone. What I can't say a substantial number of companies are planning to use it. We just came off of sapphire which is the big SAP show. The new BlackBerry was in the hands of several C level IT people with access to SAP securely data stores and we could see that this is an enormous step forward in making the carrier more of a platform for applications for IT departments. So I think stay tuned, there's an intense piloting evaluation and then it's in development programs underway through the summer and I encourage you to stay tuned during the summer for lots of news in the autumntime.

Thank you.

The next call comes from Ray Sharma, BMO Nesbitt Burns. Please go ahead.

Good afternoon, guys, got job on the op-ex. Dennis, I've just got a question for you to start on the earnings potential of the business model going forward. We've seen gross margins continue to creep higher and higher since subsequent recent quarters. Tax rates are reduce the op-ex in the last quarter as I mentioned was brought in mind. What is it implying when we look into fiscal 04 without giving obvious details, both profitability, does profitability accelerate through fiscal 04 and what does it mean in return on investment on previous investments the company has made and the implications and forward profitability?

Well, Ray, I think basically what it means is, you know, consistent with the message that we've been saying for quite some time is that there is a huge amount of leverage in the model. Gross margins are increasing and it is somewhat mix related with the software and service, but the margins are improving on hardware as well as we move to next generation devices and improve our processes and cost management on components and et cetera, so I think that the high gross margins are sustainable. I think we've always said that op-ex is high as a percentage of revenue now because we're investing into all these new programs and networks and we're not really getting the new revenue yet. So in short I think there's a tremendous amount of leverage next year in the model and it's all contingent upon revenue growth. This new market grows the way we think it will, our model should be extremely profitable and I think from our return on investment point of view, all our spending over the last two, three years in R and D has been targeted on this GPRS platform, targeted on the BlackBerry software, platform issues that Jim's talked about, we've finally been able to disclose like MDS, the ability to support multinetworks and the whole geographical expansions. So that's what we've been spending on. All the SG and A expenses have been related to building a sales and distribution teams for all these new networks and all the IT initiatives have been built on a scalable platform that can support RIM as it grows, so I think all of the investments we've made has been targeted toward this future growth, and I think you're right, there's a lot of leverage.

Okay. Is there any other ongoing plans for share parts? Have you made any additional share parts just from core direct?

No because it would be inappropriate to make share purchases in our quiet period, so we purchased shares in the previous quarter and haven't done any more purchases subsequent to that time.

And one of the points that you brought to the analyst day was that service pricing on a good thing mobile text's subscribers were to come down there would be a significant uptake in total subs, a question for Jim, is there any questions to consider anything along those lines, i.e, reducing pricing of services on mobile text's basis, subs?

Well, I think that's something entirely possible because just as a small, for instance, Cingular is announcing a program with an alternative e-mail solution and a lot of people are using the two megabyte program for $40 bucks. And that's their wholesale price and it's because sort of inefficient approaches toll them, mobile text's network chews up a lot of the network and it chews up the battery awful quick which we're really hearing in the market a lot.

So when you look at BlackBerry, we use well less than half a megabyte in a month. So if you sort of extrapolate that, then, you know, that $40, you know, and we're using a quarter of that and their retail is $40 then we're a quarter, less than a quarter of that so you should think our wholesale prices should be, you know, less than a quarter of that, and that's a retail basis.

So you, we think, you know, Cingular is aggressively repricing their network and looking at that, just refocus on the retail price of $40 for two megabytes and currently with our wholesale rates we have to charge $40 for well less than half a megabyte and we're sort of going into discussions on that. We think there's just through MFM and common carrier type circumstances, there's quite a bit of downward pressure on that and we're pretty excited about those prospects and we'll certainly keep you appraised on that as it unfolds.

Last question for you, Jim, just when you mentioned the acquisition in regard to Chinese, Japanese, Korean characters and the recent price release at Macau and China were mentioned. Can you just tell us a little bit about your business developments in that region?

Well, you know, we say stay tuned for future developments, but we get lots of, sort of comments here, you know, there's a big show last week in Asia and we're dealing with a large number of operators and all of these consortiums.

For sure, the business development teams over there are drinking water from a fire hose in opportunities right now and for sure, the demand and interest in the BlackBerry type service is very, very high as is. But what Flaingsought (phonetic) does is allows us to localize it to their fonts and give a rich experience as well as the license referencing program, what's going on there allows the carriers to sort of specifies, customize hardware.

I can only tell you in these kinds of strategies you work on them for quite a while and all of a sudden, bang, they bear fruit and we're intently committed to a localized Asian strategy and [inaudible] aspect to that and the carriers are very receptive to this and so, you know, stay tuned. I mean, we talked about Europe for a long time. We're still quiet on Latin America. We talk about North America, but I think Asia is going to garner quite a bit of attention.

And again, I sort of will stress, you know, with the new 6700 BlackBerry and TRX roaming, you can literally use that device, you can go bother your carrier partner in the real near term. That will work. I mean, I have one and it works seamless in Hong Kong, Europe, and North America, you know, and I just go U.S., Canada, Hong Kong, UK, no problem. BlackBerry and cell phone follows me. I can't - I can't stress how unbelievably compelling the experience is when you get did that way. It's hard to articulate.

Thanks, guys.

The next question comes from Barry Richards, CIBC World Markets. Please go ahead.

Good afternoon, Dennis and Jim. We've seen a handful of carrier launches here this year in 2002 and I was wondering if you could help us maybe provide some guidance or at least some clarity in modeling the quarter over quarter subscriber growth and I'm thinking about a range here because it's going to vary significantly, but I wondered if you can give us some commentary on how that ramp might happen.

Barry, I can talk in overall terms. I'm not going to go carrier by carrier. We're still loading strong numbers of subscribers on mobile text. Motion is still loading strong numbers of subscribers on their data type network. Obviously the GPRS carriers, as Jim said, are getting going and are poised, we think, to derive some real growth over the next several quarters. We guided an increase range of net net [inaudible] of 35,000 to 40,000 range which would indicate a fairly good growth subscriber growth in the in the second quarter even though it is the summertime and not usually a corporate buying season.

And Dennis, do you get monthly visibility to those numbers from the carriers and do you see a lot of variability between the four and five carriers launched already?

It's too early to tell on the new carriers launched already. Typically what we do is get a lot of visibility on obviously the direct sub ads. We get regular reporting from resale of partners and the carriers on the subscriber ads on a monthly basis. So we do get good reviews and periodic updates throughout quarters and we can get pretty decent visibility into those amounts. The new carriers, it's just too early to tell, but by all accounts their forecasts we think are extremely conservative and we try to be conservative in our expectations for them embedded into the guidance that I provided.

Great. And on the new products, I wonder if you had an interest in giving us some further commentary on the timing, the time length for CMA launch.

I think we talked about availability this autumn, early autumn. I mean, sort of mild commercial availability.

Is that consistent with, I guess, your original view, Jim?

I mean, it's within the range, plus or minus something. It's something we feel quite good about.

And last question, Dennis, we've seen a pretty noticeable change in the Canadian dollar-U.S. dollar exchange rates and I wondered if you could just talk about how that might affect the results beyond your earlier comments to the same.

Well, sure, we do report in U.S. and our revenues are in U.S. dollars. The majority of our costs of goods sold are in U.S. dollars with the exception of plant salaries, et cetera. Our Canadian expenses would be salaries in Waterloo and Ottawa. Most of the R and D expenses such as equipment and prototyping and licensing would be in U.S. and sales and marketing I've heard things like added expenditures and advertising, et cetera would also be in U.S. dollars. So it's basically salaries and I guess utilities are Canadian expenditures. Obviously if the Canadian dollar strengthens as it has relatively in the U.S., that's going to be a slight increase in expenses reported in U.S. dollars, but it's not material.

Great. Thanks. Good luck.

The next question comes from Andrew Lee, TD Newcrest. Please go ahead.

With regards to the guidance, Dennis, are you going to reiterate or discuss the actual number of subscriber ads in the fiscal 03?

Obviously, Andrew, bringing the revenue into the 353, 75, that's going to reduce the number of devices. I didn't provide a specific range, but it will be lower than the range we just discussed before. I think it would be prudent to view subscribers also at the low end of the 3 to 400,000 range that we had discussed. I mean, if we did 34,000 net subs in Q1 and are targeting 35 to 40 in Q2, that still leaves a pretty ambitious growth path for the second half of the year. We do think it's achievable, but I do think it will be for all intents and purposes I would say 250 to $350,000 that is.

In terms of the back log can you qualitatively describe what your back log vis-a-vis your carrier deals you announced or are expected to announce is in comparison to the devices built into your forecast, the device shipments?

Most of the carrier contracts that we have are over a longer period of time than just the end of this fiscal year, they run for 12, 18, or 24 months. There are forecasts that get provided to us and we get PLs locked in on a rolling three-month basis. There is some flexibility beyond three months as to the timing of when those units get shipped so I can't map the back log directly quarter by quarter.

I will say our back log continues to increase as we sign up more carrier deals and we have not shipped substantial amounts of GPRS beyond initial shipments into most of these carriers. We do have a continuing regular base of mobile text and data text that still do ship. I would say without giving specifics that I feel comfortable where our forecasts are in relation to where the back log is and the expected timing both on the carrier partners from our direct and from our own reselling partners.

Two other quickies. Number one, what is the sort of range that you would typically ship to a new carrier? I don't know if the [inaudible] someone is a get example for other deals and do you tend to ship to any [inaudible] in the quarter. Thanks.

I would say most of the new carrier deals they would take initial quantities. Obviously many of the carriers are different sizes, anywhere in the 5 to 10-K range would be reasonable initial quantity that would get their internal sales folks using it, gets trials underway with the hundreds of corporate customers that they're each working on, so therefore MMO2 wouldn't be a great example because they were taking over a number of different quarters and just had issues of network readiness, et cetera.

So the typical initial shipment amounts aren't onerous. We're not creating a great deal of channel inventory and continued shipments to these carriers will depend on sell through and so we're very closely watching that and we did ship a small number of units to Motion during the quarter.

All right. Thank you.

The next question comes from Howard Lis, Griffiths McBurney. Please go ahead.

Hi, good afternoon, guys. Just if you could talk a bit about your market intelligence as the various carriers start selling the devices commercially, and have their launches. What sort of feedback and information are you getting on an ongoing basis about the actual additions during the quarter, the inventory level, that sort of thing or do you simply operate more on a rotating sort of 90-degree window of orders? Thanks.

Howard, there's a great deal of feedback between our carrier teams and each carrier partner. So we obviously when they activate users it runs [inaudible]. We have a very good idea of the level of their activations. Our folks are working very closely with them in all these accounts and helping run the trials and the pilots, et cetera. So I would say we're very well connected into that.

And do you have any information about how many customers are signing up for the new devices that are also taking the voice packages, maybe not on a percentage basis?

I'm afraid I don't have those stats with me right now. I think the majority of the early users on Voice Stream and AWS are putting voice on as well. I don't know if that's indicative of final usage. I would estimate with a 6700 platform, an integrated speaker mic, you probably have get a much, much higher percentage of end users having voice than perhaps on a 5810, but I think their percentage has been pretty high.

Great. And Dennis, sorry. It was hard to get on the call. I was wondering if you could review what you think the year end cash balance would be and what you think the lowest cash balance would be before you start generating cash. Thanks.

I hadn't really provided it in that way, but I said that we expect to burn about $40 million in Q2, $20 to $30 million in Q3, about $20 in Q4, so I guess cumulatively, that is anywhere from $80 to $90 million. That would be not including any potential share repurchases that may happen on a go forward basis or of course any acquisitions that aren't currently contemplated. We're expecting to return to profitability in Q4 assuming cap-ex remains fairly steady at a modest $15 to $20 little I don't know level or perhaps even less per quarter through next year. I would expect us to be overall cash flow positive by the midpoint of next year.

Great. Thanks very much, guys. Congratulations on a good quarter in a tough environment.

The next question comes from Deepak Chopra, National Bank Financial. Please go ahead.

Good afternoon, gentlemen. Jim, I was wondering if maybe you would talk about the pace of 2 1/2 G deployments and what are the issues now that you're seeing, are they moving in technical to nature to more logistical and on the reference design, the reference design platform, what is the profile of the typical customers that you're talking to at this point? Thank you.

Sure. The just I want to get this down. The pace involvement, I would say the number one resting item in the short of launch of these networks was overall code readiness, and that's, you know, that's - I mean, there's still sort of network upgrades from switch providers going on and clearly we have to work hand in glove with that so we have to be tested and certified against it.

So I would say the pace of development, you know, truthfully the carriers that went first globally experienced the sort of pain of having to harden code of which other carriers get the benefits of substantially, the benefit that they get from going quickly is that they get a chance to mature some processes. So I would say not as leveragible by other carriers, that's specific to each carrier.

So I think the pace is definitely accelerating, one, because the code is starting to harden from the switch players and there's two or three main switch players and it's getting quite good and the upgrades are less substantial and seem to nail the key issues.

And second, we're getting better at understanding processes. We've trained several hundred account people and we have a whole training program with carrier sales reps around the globe. Our processes for helping them channel department, develop and localization, go to market, there's elements of that reusable and becoming optimized.

So I would say the pace of 2 1/2 G readiness and introduction is clearly accelerating and optimizing. And just look at the frequency of announcements that you've seen in the last two, three months and frequency accelerate, which we think is a very positive story. And again, we get a lot of visibility for this stuff going through the painful stuff and sort of relief laden launch stuff.

In terms of the reference design customer profile, those tend to be big cellular phone companies who are often sort of computer PDA companies too, and these companies have both of these existing businesses often very frequently they're Asian but not always. And really there's a great belief, you know, those are sort of separate businesses, the computer PDA stuff and the cell phone stuff and the belief is I think clearly with GPRS, 2 1/2 G, J to a me (phonetic), there's a merger of that sort of computing world and the cell phone world and really they want the design and plumbing to get in that market but, you know, you look at reasonable size, pretty good size different Asian companies who do PDAs and/or do sort of phones, slightly higher end GSM phones, very frequently their ADI customers are hard core and they're the dead on target that we're working closely with.

In terms of the company you previously used to say you expected to be in 15 countries in 30 [inaudible] by the end of the year. Are you willing to make a statement of that nature now?

I mean, I think we're - I mean, if I said that, I mean, I - I could have represented something like that. Certainly we're dealing with substantially more than that in terms of number of carriers. I mean, you know, just by turning on Voda you'll get 14 of those. And that's turning on right now. With - and with [inaudible]. So just by turning on T-Mobile's design you get 12. In a sense some of those are overlap countries, but you just add those together that's 26. And probably Net Net there's a dozen, so 15 country, it's in Hutch we've only launched one but their GRX thing, to most Asian countries right now.

So, yeah, I would say I feel quite comfortable with that kind of representation. But truthfully, the nature of this technology, I think, you know, as long as things keep going the way we're seeing them, we should shoot through that type of capability quite quickly. There's a couple of hundred of these carriers around the globe and, you know, everybody wanted it.

It doesn't matter - we're talking big countries, but you go to places like Latin America and South Africa and Middle Eastern and so on, they all have the same issues and they all have, you know, big companies in their domicile there or a couple of people who are traveling through who want the service.

So it's just wonderful because, you know, our market of users sort of sees our demand base as they travel globally. And like I said, this type of ability to work in a bunch of countries already is going to be quite commercial, I mean, many people are living it and testing it as we speak right now, so with a daily kind of pull the curtain and say ta-da, here's our pricing scheme, you know, is it going to be this summer in September? You can debate that. But we're really deep in this game and I really want to stress to those on the call, this is stuff we've been doing some heavy lifting for a couple of years to make it simple and easy for the user. This is not out of the box, trivial stuff.

Thanks.

The next question comes from Garth Papageorgio (phonetic), Scotia (phonetic) Capital. Please go ahead.

Thanks. Question for Dennis and for Jim. Dennis, can you give us an idea of the proportion of revenues that came from outside North America in your last fiscal year, where you are relative to that currently, and where you expect that to be by the fourth quarter and then for Jim, hearing some concerns out of the UK that in terms of the roaming feature for the BlackBerry, not as robust as traditional cell phones. I was wondering if you'd talk about how, when we can expect the roaming features to improve and have - when do you expect to have seamless roaming throughout the continent for both voice and data?

This is Dennis. The majority of our shipments outside North America were the MMO2 and, you know, that was several tens of thousands of handhelds in the November and a little bit in the in the August quarter and then November and February. I think obviously the remainder of it was in North America. This year it's going to be much, much different. I think in the first half they said previously the majority is still going to be North America but I think Europe and Asia become very meaningful pieces in the second half of this year. Without going into specifics, I think that's a trend that we're expecting.

Is it fair to assume that the majority of the growth, quarterly growth in Q3 and Q4 in your current run rate about be outside North America.

I don't think that's completely fair because we do have the issue of existing BlackBerry subscribers moving to GPRS, so that could certainly drive substantial hardware sales. I think in terms of overall subscriber growth there's a lot of AWS and a lot of Voice Stream and a lot of Nextel sales reps out there that are going to be working pretty hard in North America so we're expecting a lot of growth if North America, but yeah, the European and Asian markets are a pure green field for us and that's going to be nice, incremental growth.

On your second question, the - yeah, the robustness of GRX roaming, that's still a capability that in certain cases is available in minimal countries, you know, maybe going from UK to Germany on the MMO2. What I will say is our test people and the carrier test people are in internal datas experiencing a very positive GRX capability, really drove most country, frankly in Asia and throughout most of Europe, but this hasn't been commercially launched and many of these countries are on the cusp of turning on their GPRS networks.

So yeah, those who have wanted GRX roaming haven't had it, and that is a very near turn phenomenon by many of these countries turning on. Like when did TIM turn on, two, three weeks ago? Many of these things, they work well but they haven't been commercially launched. So yeah, it's been a frustrating user experience in the sense that they didn't have voice turned on much of the time, which was turned on. They couldn't roam much of the time, which is now being established. You know, maybe these carriers hadn't turned on their GPRS yet and also the issue of needing separate hardware when you go from Europe to North America and what I'm representing is guess what, all of these problems have either been 100 percent addressed or have been virtually completely addressed and are very near term ready for commercial launch and you bet, but this is all aspects of the teething pains of getting a push kind of enterprise service working in multiple carriers, multiple jurisdictions, and that's the kind of thing we've done, and I think the user experience can be very, very compelling, very short order.

Operator, we have time for one more question.

The last question comes from Paul Coster, JP Morgan. Please go ahead.

I'll try to slip in a couple, if I may. The - are there any 10 percent customers at the moment?

You mean as far as -

Concentration in terms of revenues.

The largest customers in the corner would continue to be Cingular, Voice Stream, AWS always in North America and then some distributions throughout Europe, most of them being smaller than 10 percent.

How many of the (inaudible) installations in the UK now, approximately, are you prepared to divulge? I think it was 150 last time we talked?

I think that BT had - or MMO2 had disclosed a 250 number in their press release several months ago. They have not provided updated numbers therefore I can't publicly, but I do know that they continue to get it into many more companies.

How many shares can you buy back?

We have announced a share repurchase plan of up to 5 million shares.

Thank you. And lastly, average selling price, I just missed that.

Just one second. Handheld ASPs were $445, up from $380 in the prior quarter.

Thank you very much.

And in closing I'd like to remind everyone that there's a post view service available, 416-640-1917. Reservation number is 181806 pound. You can also listen to the call at www.rim.net\investors\index.shtnl. Thanks very much.

Ladies and gentlemen, this concludes your conference call for today. Thank you for participating and please disconnect your lines.