Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Research In Motion Limited Third Quarter Fiscal 2007 Results 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 for you to queue up for question. (Operator Instructions). I would like to remind everyone that this conference call is being recorded on Thursday, December 21, 2006, at 5:00 p.m. Eastern Time. I would now like to turn the conference over to Mr. Dennis Kavelman, Chief Financial Officer. Please go ahead, sir.

Thank you, and welcome to RIM’s fiscal 2007 preliminary third quarter results 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 third quarter results, as well as our guidance for Q4. I will then turn the call over to Jim who will provide a business and strategic update. We will open up the call for questions after that. I would like to note that this call is available to the general public by a call-in number and webcast. A replay of the webcast will also be available on the rim.com website. We plan to wrap up the call at approximately 6:00 p.m. Eastern this evening. Some of the statements Jim and I will be making today constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian Securities laws. These include statements about RIM’s ongoing management-initiated voluntary review of its historical option granting practices, including statements regarding preliminary determinations and current expectations, our expectations and estimates with respect to revenue, gross margin, operating expenses, stock option expense, CapEx, depreciation and amortization, investment income, earnings, earnings per share, and ASPs for Q4 and beyond, our expectations regarding RIM’s near and long-term tax rates, our estimates of the number of BlackBerry subscriber accounts, subscriber accounts additions and other non-financial estimates, our product development initiatives and timing, developments relating to our carrier partners, new and expanding markets for our products and other statements regarding our plans and objectives. We will indicate forward-looking statements by using words such as expect, anticipate, estimate, may, will, should, forecast, intend, believe, and similar expressions. All forward-looking statements reflect our current views with respect to future events and are subject to risks…

Thank you Dennis. We're pleased with the results from our third quarter. The response to the recent product launches exceeded our expectations and we're seeing good momentum in our business as we head into the New Year. Both the prosumer and enterprise segments are performing well and growth in international markets is strong. For business update, the launch of the Pearl has been the most successful BlackBerry launch that we've ever had, and the early momentum that we've discussed on the last call has continued. Pearl is now available on 36 carry networks in 22 countries, and we expect the pace of rollout around the world to continue. Reviews of the Pearl have been overwhelmingly positive. For example, Walt Mossberg of the Wall Street Journal called Pearl "a beautiful piece of work, a very nice combination of hardcore e-mail capability and fun feature." David Pogue of the New York Times said, in the end this very polished Pearl is all about the sweet spot; for such a wisp of a thing, it's an awful lot of machine. Consider how many things it does, and how well, you may be amazed to learn that no laws of physics were broken in the making of this phone. And, Russ Fischer from Laptop Magazine said, "the Pearl is the sexiest phone yet and a strong performer to boot." Our intention with Pearl was to open up a new market segment for BlackBerry and this is what we've experienced. There has been no decline in the 8700 run rate after Pearl was launched at a new carrier, and we're seeing the split between BES and BIS activations on Pearl much more heavily weighted to BIS than on our enterprise oriented devices. This clearly indicates that we're getting into a part of the market where…

Thank you. Ladies and gentlemen, we will now conduct a question-and-answer session. (Operator Instructions). Your first question comes from Maynard Um from UBS. Please go ahead with your question.

Hi. Thank you. Just looking at the enterprise side of the business, can you talk about how Europe is ramping? Are we starting to see that inflection point that we've all been expecting? And somewhat related if you could just talk about, do you think Europe and the entrants into this consumer market might help offset any of the subscriber seasonality as we look forward? Thanks.

Well, we're definitely seeing the enterprise accelerate in Europe, and we're seeing tremendous increase in BES sales. So there is no question Europe is galloping ahead, but as fast as BES growth, BIS is also growing because big parts of Europe, there are a lot of different countries that aren't as sort of corporate oriented or more SME and SOHO oriented. So, it's grown there. But there is no question in my mind the enterprise aspect of Europe has really turned the corner. And the whole retail aspect which we spend a little time talking about has really turned the quarter. Why this is important is because 80% of B2B sims are bought in B2C channels, but they tend not to sell B2B apps unless they got strong B2B relevance because that’s the larger portion of traffic. So, the fact that we have such an attractive device, and a solution it's really transparent between B2B apps and B2C apps or can be combined has really sort of cracked the code there. So, at the core, both are doing well but there is no question that the enterprise part of Europe has really turned the corner. And I think there were some very important security concerns and security priorities raised in Europe. And now we're seeing so much media and so much media, and so much authority saying not only BlackBerry, as BlackBerry approved it’s the only approved and the only secured wireless offering out there. So, it’s a little harder to crack the European markets because there is so many different carriers, so many different country, so many different languages. It’s kind of more complex to sort of become kind of standard but I would really like to say that I think we've really crossed that region we are really there.

And does that help offset any subscriber seasonality because the consumer market is so new? As we look forward, in forward quarters?

Maynard this is Dennis. I mean the answer is, we don’t know. I think this is going to be interesting year because we're going to see how these things play out, especially over the Christmas holidays, clearly you would expect some consumer demand ahead of Christmas, what happens after Christmas, we're not sure and that’s why we're forecasting a bit of a depth that we've seen before after the holidays. When we come back around to in the summer, in the month of August again, you know, there I mean you could see a back to school thing, maybe offset some of the normal enterprise slowdown but its way to really to tell and I think we're going to learning as we go this year to see how that consumer channel does changes some of the seasonality impacts we’ve had in the past.

Great, thanks congratulations.

Thanks.

Your next question comes from Gus Papageorgiou from Scotia Capital. Please go ahead.

Thanks. Congratulations on a good quarter. Dennis, just on the gross margins, could you kind of contrast the gross margins on the Pearl relative to traditional BlackBerry devices. Would it be fair to say it is probably lower than other BlackBerry devices and if so, over its life cycle do you think it will trend higher or is your intention to keep the gross margin of that device below kind of where your traditional levels have been.

It’s a tough question to answer Gus, because we don’t break it out by product. I would say that it's clear the ASP as well on the Pearl as we are going into these new markets, but to get that all ASPs at channel or the challenge gets put back to Mike and Larry and the team to get cost down. So, I would say that margins on the Pearl are in line with sort of our overall average hardware products, some of them are better, some of them are worse as Pearl has scaled up very quickly and we are using our outsourcing partners. I think there are some improvements there. There is no question that going forward one of the big tasks before the engineering team is to continue to drop cost faster, faster than we are dropping ASPs into these new markets.

Okay. And just as a point of clarification, did you say that subscribers outside North America represented 27% of total subs?

Yeah, on an overall basis, not in the quarter, but overall it is 27%.

Great. Thanks.

Your next question comes from Rob Sanderson from American Technology Research. Please go ahead.

Yeah. Thank you. Good afternoon everyone, and congratulations on the continued acceleration and adoption, very good sign. A couple of quick ones, first Dennis, can you help us think through how we should be thinking about software revenues going forward? I think it's your most lumpy segment and we have seen a sort of a drop off without a new platform upgrade, what should be we thinking about for the forward year in software?

Well, when I said for Q4 that we expected to be up a little bit over the $43 million in Q3, I think we expected to steadily creep up as we go through next year. T-Support is part of that software line and we are definitely selling more and more T-Support contracts and haven’t even really cracked the outside of North America market for T-Support. So I think there is some growth there, but as always we do use BES software packages as part of our marketing programs that we do with carriers, and that offsets some of the growth. So I think you just model it as sort of a modest growth quarter-over-quarter, and I will keep providing updates whenever we get any visibility on it.

Okay. Great, thanks. Quickly, you mentioned inventory write-down on gross margin, was that a material impact, could you give us a little bit of color on maybe how many basis points that may have taken from --

I won’t give the exact number. It wasn’t huge. It's a kind of thing we always go through whenever we're transitioning to new products and end of life in old ones. It's you want to have just enough parts so that you can build everything you need without having too many leftover and you certainly don’t want to stock out. So whenever you do have products that you are taking to end of life, you have sometimes these small write-downs. So I would say, it wasn’t significant on the order of few million dollars, but every little bit counts and it's something that we will have going forward from time to time. It's just how good can you forecast this end of life transitions.

Great, keep up the good work guys. Thanks.

Thanks.

Your next question comes from Christin Armacost from Lazard Capital Markets. Please go ahead.

Hi. Thank you, good afternoon. I was wondering if you are not going to breakout the Pearl unit sold in the quarter, if you can at least help us understand how much of the growth from Pearl came from the US versus outside -- the North American market versus outside the North American market.

Sure. I mean well clearly the first carriers to launch Pearl were T-Mobile and Rogers in North America and they were very, very significant, but we also had a number of large carriers launched across Europe later in the quarter. So I think it's safe to say that the majority of the Pearl impact in Q3 was in North America, with Europe coming on in the latter part of the quarter.

Great, thank you.

Your next question comes from Mike Ounjian from Credit Suisse, please go ahead.

Great, thank you. Jim clearly the Pearl is driving a lot of success on the consumer side of the market given the ramp up in BIS activations. I mean how -- I guess how do you think about going into '08 as you're broadening addressable market, just what that means for the number of product launches we've to do and tell me how that’s going to impact the breadth of the marketing programs you're going to have to do?

Well, I'd have to say that there is no question we've entered into a unexciting space. So we're well positioned and obviously, we're very well positioned and the opportunity is as attractive as one would think. And, so our focus is on the execution that goes into that. So there is definitely a big focus on marketing because it drives such near-term and long-term sales results. So the execution intensity here is just that, very intense. And so I think for '08, I mean, I think Dennis gave you an indication of our expectations on guidance. I think we have the framework of Pearl in now itself is so successful, but quite frankly there are some nicely aligned hardware plans that are going to go with it. And I think are going to dazzle a lot of people. I think the application framework of the BIS and the BES has really proven itself, and I'll try to talk about the applications and the channel. Well now people are (inaudible) wireless so much of the channel focus, I forget there is some dramatic overwhelming majority goes into B2C -- of the activations come out of B2C channels. But really the marketing has been really focused on brand creation and fulfillment to bid these channels, and they are really -- and they sort of take it from there. Well, it shifts with data because you need more capacity or expertise in the channel. So, we’ve invested very heavily in building expertise in the channel in partnership with the carriers and they've really sort of hit, sort of, I guess, to use sort of mining vernacular or vein here that’s very rich. And so, the Pearl and the BES and associate but every time we do a retail blip 40% to 50% of…

Great thanks, that's helpful. And Dennis, just one clarification you mentioned on the legal expense being a little higher than expected this quarter. How meaningful was that in the uptick in SG&A?

It was -- I don’t want to break out a specific number, but it was in the single digit millions of dollars.

Okay. Thank you very much and happy holidays for both of you.

Thanks.

Your next question comes from James Faucette from Pacific Crest. Please go ahead.

Thanks. I just had follow-up questions related to the mix between BIS and BES customers and subscribers, specifically on the Pearl, I know you said that the Pearl is growing in a lot more BIS customers and subscribers. But can you give us an idea kind of what that mix looks like firstly, and how that matched-up versus what your expectations were as you want a Pearl? And then looking forward, how should we think about the new devices, as they come to market are these going to be devices that you expect to draw more BES type subscribers or will it continue to be the push into the BIS market? Thank you.

James, this is Dennis. I can't go down into giving you the mix breakout. What I can say is clearly the Pearl sold into both markets, into enterprise users and into but we did, I wanted to highlight that when we were launching, and we talked a lot about it was targeted to really open up this new market for us and that's the point of where our emphasis is that that in the carriers that launched Pearl, we saw a substantial increase in percentage of BIS users amongst their subscriber as compared to prior quarters. So yes, it drill new subs, in the enterprise so we did see a big increase in BIS, and that’s really what I was trying to get out is that, it certainly appears to have done its job and hit its target, and I can't provide you the specific breakout. As far as new products for next year, some of them will target enterprise users, some of them will be targeting both and sell well into both market. So, it's pretty tough to talk about things that haven’t been officially announced yet.

So, it's clear obviously on -- that the BIS -- that the post brand BIS subscribers, how -- but I guess may be in the more general sense, did that basically live up to your expectations or was there a more crossover into the BES than may be you would have anticipated?

The Pearl?

Yes.

The Pearl was way more corporate than we expected. It did great, don't get me wrong. It drove a -- it drove a lot of BIS but we didn’t realize it would be so popular in corporate, we were planning on that. And you expected -- and I expected more cannibalization which it didn’t. So, that was kind of interesting. The new devices that are just going to be, may be something else, I think you are going to see them really be something else both on the consumer and something else on the enterprise, and a lot of crossover stuff. So, I can only sort of say that, a whole lot is going to become a lot clearer in the next six calendar months. I think six months from now, because there is a lot -- there is a whole sequencing of things -- you are going to see a heartbeat of application partners and upgrades by us and new hardware and new capacities and new channels, new carriers where -- I mean you work on these things for two or three years and then they're all starting to sort of gel right now. But they don’t really separate well. They just become this pinball thing. They just bang, bang, bang, bang, bang in a very -- there has got to be some derivative to [Metcash] law for this kind of interrelated aspect because it's not just a square of the value of networks, it is the square of participants on sort of exponential sort of uniform basis. It's other constituencies hallowing -- constituencies you didn’t think they would. And so, it's a bit of a surprise right now, but clearly a positive surprise, but a bit of a surprise.

Great, thank you.

Your next question comes from Mike Abramsky from RBC Capital Market. Please go ahead with your question.

Yes, thanks very much. Dennis perhaps you could -- could you just help us -- give us maybe a bit of color on ARPU, which you see maybe as the trend in ARPU is going forward, is there is a mix shift to lower cost data plans and I think you discussed that the data attach rates maybe different on the consumer side and also maybe what you see is the trend in your rev share?

Sure. I mean the enterprise ARPU has been pretty consistent. The changes there are mainly, as I've said, as carriers hit certain levels of numbers that have subscriber accounts, they move down into different price points. But that’s absolutely nothing new. Full BIS pricing hasn’t changed much. We are seeing carriers launch pay-as-you-go in some lower price plans. So, as those come on that could have an impact in terms of mix but they're still around the low end of the BIS range, that we’ve talked about before the $3 to $5 range. Certainly if BIS becomes a larger percentage of the mix of users that will impact overall ARPU, but we also get good economies of scale as we grow adding close to 1 million subscribers a quarter, I mean, who would have thought it even a short time ago has some very good scale benefit. So, again we're decreasing cost very quickly there. But we're seeing the ARPU unfold as we thought. There is not too many of legacy Mobitec subscribers still to turn off. So, I think that’s been a large part of the ARPU decrease this quarter-over-quarter in the last several years. On a go forward basis, it will be mainly mix and perhaps some of the impact of introducing some of these lower price or pay-as-go plan.

And maybe this is more for Jim, but what do you think the important kind of monthly data price points, do you think the carriers in the North America and Europe maybe get to, to accelerate consumer growth and we're hearing Canada, and if you are going to Rogers and buy a Pearl, the upfront cost of the phone is very attractive, but the data plans are still fairly expensive for say more of a consumer walking in.

Yeah. I mean they have a lot of market power being the only GSM operator. So, I think that’s a bit of an anomaly. And, I think you are seeing in Europe, the really powerful adoption of greater aggressive plan. It's really a strategic thing from the carriers, they -- I mean, some carriers you sort of have them say, we want to be a closed media platform, but here's in all you can eat PC card on our broadband network at a fixed price, which are really kind of contradictory strategies. And then or you could say BlackBerry is nice, and I can do some skim pricing just by charging AlaCard as you add services. The carriers that I think are really excelling sit there and say on a profit basis BlackBerry is -- they realize it's 4, 5, 6x the normal subscriber, but their penetration rates are not sort of -- they are not of magnitude away from where they should be and why they put in these advanced networks. And I think if carriers are smart, they can morph their relationship and they are morphing their relationship to be a strategic platform versus just opportunistic pricing for whatever. And then at that point, they play a much more different role in the ecosystem, which I think it's an enormous opportunity for the carriers to step into like -- I really do believe that this well played two or three years from now people will look back and go, oh, my goodness, the carrier is the epicenter of way more than anyone ever -- and that’s a big swing from the world as you may remember three or four, five years ago when people would say, no, the carrier is just going to be a disintermediated bit pipe.…

Thanks. Congratulations on a great result.

Gentlemen, would you like to take another question at this time?

Yeah, I think, we'll take one more operator.

Your final question comes from John Bucher from BMO Capital Market. Please go ahead with your question.

John Bucher, thank you. Questioned on update on your positioning of the BES platform within the enterprise? Can you give us an idea I think that your last Capital Markets Day 60% of the BES servers you indicated were being utilized for MDS traffic. Can you update that? And also, there has been a fairly substantial increase in the number of independent software vendors that you mentioned 500 up from 370 than at that same Analyst Day. Have you increased the resource through allocating to your independent software developer program and just a general update on sort of the stickiness of your platform within the enterprise market? Thank you.

This is maybe the most fun, my work is the [op] guidance, like. For those of you that haven't sort of ripped CDs on a Blackberry or taken a picture and sent it or seen guys that - those companies coming out where you can order flowers and or play games, online games and there are companies -- games of skill and if you've seen the drive-by-drive directions and you're going to see tremendous Yahoo! Go stuff in the near term and Google Local and can see a lot of Microsoft Live, and you're going to see some tremendous multimedia integration both on the enterprise and the non-enterprise side, multimedia on the BlackBerry and the whole PBX integration is really central math because that was considered sort of important. And then putting a Wi-Fi in these things, I mean it just, you know on the push-to-talk. Playing songs and push to talk is just a software at. On a presentation terminal for a strategic platform and everything is impact. So, it just, those of you that follow us closely, I would argue that if you really paid attention to us and you are real expert, you might have sense of 20% of what's really going on. But the general person analyzing sort of (inaudible) revise, I would say, is still a single digit of that. So, we’re investing heavily, you will be blown away by if you knew all the app stuff is going on, and that’s why, I sort of try to say like, carriers are delighted but they want to be that strategic platform. Users and corporations have finding it transformative both for organizational productivity and individual delight and the other pony in that here is, all the keepers of what I call the stores, the PBX stores or the search store or the IM store or the ERP store. There is kind of -- they are finding them relevant and opportunity multiplying. And so, this is the biggest enabler that I am seeing by an order of magnitude anywhere in Tech and Telecom and anyone who is touching it is being positively dragged along. So, we're investing aggressively in it, there is no question in ad services and channel programs and in ISP programs, we're aggressively enriching the environment, the platform, and we are spending a ton of time opening up new APIs and supporting them, and it's just super, super exciting, and just really -- you're just going to keep seeing more and more stuff, not days and not weeks going to go by when there aren’t two or three subsequent developments as it happened in the last quarter, as it happened in the last year, and it's happening at increasing rate.

Okay, I think this concludes the call. I would like to thank everyone and there is a post fee service available 416-640-1917. I'll give the reservation number 21212410 pound, but you can also listen to the call, which is recorded and it's on the Investor Event section of our website. So happy holidays and we'll see you all in the New Year.

Ladies and gentlemen, this concludes the conference call for today. Thank you for participating. You may now disconnect your lines.