Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Research In Motion third quarter fiscal 2009 results conference call. (Operator Instructions) I will now turn the conference over to Edel Ebbs, Vice President of Investor Relations. Please go ahead.

Thank you. Welcome to RIM's fiscal 2009 third quarter results conference call. With me on the call today is Jim Balsillie, RIM's Co-CEO, and Brian Bidulka, RIM's Chief Accounting Officer. After I read the required forward-looking statements disclaimer, Jim will provide a business and strategic update. Brian will then review third quarter results, and I will discuss our outlook for the fourth quarter of fiscal 2009. We will then open the call up for questions. I would like to note that this call is available to the general public via 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 before 6:00 p.m. Eastern this evening. Some of the statements we will be making today constitute forward-looking statements within th meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. These include statements about our expectations and estimates with respect to revenue, gross margin, operating expenses, CapEx, depreciation and amortization, investment income, earnings, earnings per share, channel inventory, seasonality, ASPs and foreign exchange related matters for Q4 and beyond, our expectations regarding RIM's near and long-term tax rates, as well as the timing and effect of proposed changes to Canadian tax laws, our estimates of the number of BlackBerry shipments, subscriber accounts, subscriber account additions, replacement device sales, prepaid plans and other non-financial estimates, our produce 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, continue and similar expressions. All forward-looking statements reflect our current views with respect to future events and are subject…

Thank you, Edel. We're pleased to report third quarter revenues of $2.78 billion, up 66% from the prior year, and adjusted earnings per share of $0.86, up from $0.65 per share in the same quarter last year. Q3 results were in line with preliminary Q3 results reported on December 2nd, but lower than originally estimated primarily due to delays in the launches of certain new products, mix of product shipped in the quarter, and unfavorable foreign exchange rates. We believe that the weakness in the U.S. economy had an impact. RIM shipped approximately 6.7 million units in Q3, with new products launched in the quarter accounting for a higher than expected percentage of the total. The rate of adoption of our new products in Q3 was faster than we anticipated, and we expect this to continue in the fourth quarter. As a result of the strong demand for these feature-rich products, particularly Storm, the volume of shipments expected in Q4 is higher than Q3, between 7.5 and 8 million units. The rapid shift in product mix from earlier products to these newer products over a short period of time is causing our gross margin to decline faster than we expected, and the blended gross margin for Q4 is expected to be lower than Q3 at between 40% and 41%. This includes a foreign exchange impact of approximately 1% due to the continued unfavorable relative foreign exchange rates. We're working closely with our suppliers, manufacturing partners and design teams to reduce costs in our new product platforms and we'll begin to see the effect of these later in the quarter and more fully as we head into fiscal 2010. Based on our current forecast for ASP and product mix, we expect a gross margin percentage for fiscal 2010 will be in…

Thank you, Jim. Revenue for the third quarter ended November 29th was $2.78 billion, up 8% from $2.58 billion in the previous quarter. Hand-held devices represented $2.25 billion or 81% of RIM's revenue during the quarter, in line with the previous quarter. Total devices shipped in the quarter of approximately 6.7 million were up from 6.1 million in the prior quarter. Approximately 5.2 million new devices were activated in Q3, either for new customers or for replacements and upgrades, not including phone only sales. Forward weeks of channel inventory at the end of Q3 were down slightly from Q2, and we expect channel inventory at the end of Q4 to be lower than at the end of Q3. Device ASPs in the quarter were approximately $337. This was lower than originally estimated due primarily to the impact of the strong U.S. dollar on device ASPs outside the United States. Service revenue was $361 million or 13% of revenue for the quarter, up $28 million from Q2. Monthly ARPU declined slightly from the prior quarter. Software revenue was $62 million or 2% of revenue. Other revenue, including non-warranty repairs and accessories, was $107 million or 4% of revenue. Gross margin for the third quarter was 45.6%, lower than originally estimated and in line with our pre-announcement. Primary factors leading to a lower than originally expected gross margin were unfavorable foreign exchange impact on device ASPs, which we estimate reduced gross margin by approximately 1%, and the mix of handsets shipped in the quarter, with new generation handsets making up significantly more of the total shipments than expected. Operating expenses increased by 4% over Q2, slightly less in dollar terms than we forecast last quarter, but similar as a percent of revenue. This favorability was due primarily to a positive foreign exchange…

Thanks, Brian. Before I discuss our outlook for Q4, I'd like to remind everyone that these forward-looking statements reflect management's best current estimates and should be taken in the context of the risk factors listed at the beginning of the call and outlined in our public filings. We're forecasting revenue for the fourth quarter of fiscal 2009 to be significantly higher than Q3, in the range of $3.3 billion to $3.5 billion. We have a high percentage of orders already booked for the fourth quarter, giving us confidence in our forecast in these less-certain economic times. However, we have widened the guidance range due to the difficulty in forecasting the impact of foreign exchange in the current volatile markets and ongoing uncertainty in predicting the impact of a weakening global economy beyond what we see today. We expect hardware shipments to be between 7.5 and 8 million units at an ASP of approximately $370, up from $337 in the third quarter, due to the higher proportion of premium products expected in the mix. The growth in shipments will be driven by demand for new products, particularly Storm, as we continue our production ramp to meet the strong demand we are experiencing and to alleviate any remaining stock out situations. We are also forecasting large shipments of Bold, Curve 8900, and the iDEN Curve 8350i for Q4. Software revenue in Q4 is expected to increase slightly. We are target net subscriber account additions for Q4 of approximately 2.9 million. As Jim mentioned, December has been a very strong month for BlackBerry net subscriber account additions, with many carriers hitting their highest levels of net activations ever and with channel and marketing support for BlackBerry products at an all-time high. We are forecasting a seasonal step down in the run rate of…

Thank you very much, Edel. We're pleased to be entering the fourth quarter building on the momentum of a strong Black Friday and holiday buying season. Despite the current turmoil in the economy, we believe RIM is well positioned to take advantage of the industry shift to smartphones that is occurring and to grow its share in this market segment. This concludes our formal comments, and we'd like to open the call up for questions. To allow as many people as possible to participate, please limit yourself to one question per person. We plan to end the call today by approximately 6:00 p.m. Would the operator please come on to handle questions?

Thank you. (Operator Instructions) Your first question comes from Maynard Um - UBS.

I just want to clarify your guidance. Are you assuming you're going to see a normal seasonal step down through December into January or towards the end of December and then into January, and then February you're seeing a pick back up because of the higher concentration? What I'm trying to understand, I guess, is just how much conservatism you're building into the month of February, where typically we would see a bounce back. And then if I could, just how long does the [HRO] agreement go on for with Verizon and Vodafone?

I'll answer your subscriber question first. So, I mean, what we've built into the guidance, obviously we've had a very strong December up to this point. You would normally see a slowdown from the sort of Christmas on into January, and we have that type of seasonality built in. In terms of February, we're expecting it to still be a good bit slower than December, but in the latter part, when some of the carriers start the Valentine's Day promotions and there's a higher concentration of those running, we would expect that run rate to be higher than what we were seeing, say, in January. Does that help?

That does. But as you go back into January, you're expecting greater than seasonal declines that you've seen historically?

I think I understand your question, Maynard, and I think the answer principally lies in what Edel said that we have a high percentage of orders already booked in the fourth quarter. So there's elements of seasonality, but we have particularly good visibility because of extended orders for the hot new products. So I would say we've tried to take an especially prudent approach to guidance on our revenue this quarter, beyond seasonality, and what we're guiding, we have a particularly good proportion of the orders already in the book.

And then just on the HRO agreement, how long does that go on for, Verizon and Vodafone?

Well, there's elements of different versions and extension of that, but that product, we're just seeing volumes that are really quite surprising and backlogged orders, and it really extended high deliveries, certainly well throughout Q4. And there's varying ways to sort of carry on that HRO agreement. I think this is a - we're in the very early part of the first inning in this relationship and it all looks very good, so there's lots of legs on that HRO agreement to go.

Your next question comes from Gus Papageorgiou - Scotia Capital.

I just want to talk about the gross margins a little bit. Can you just also - I know you discussed a little bit of the influences on gross margin. I was wondering if you could also just touch on warranty costs and impact on the gross margin? I mean, are warranty costs for the new products higher than what you normally saw? Also maybe, is there any difference on the gross margin geographically, so devices sold in different regions, do they carry different gross margins or are they uniform across all geographies? And then finally, just can you talk a little bit about pricing? I mean, you've seen very good success or better than expected success on these devices. Were there terms in the agreements that if you surpassed certain volumes, the pricing would come down?

Gus, on the warranty question, there's really, I mean, we have a standard policy in how we handle warranties for new products, and there's been no change in that policy. In terms of pricing on international versus North America products, I really - within a particular region, the pricing on the products is typically the same, but in some international markets the pricing may be a bit higher on an ASP basis than it would be in a North American market. Sometimes that's tied to volume. And what was the third question?

I think it was geographic differences in pricing and no, the focus now really is - no, the pricing is really attractive and it's very established with these products. The key for us is to work the costing down, and I think we feel very positive. I think the adoption of the new products was stronger than we expected and the interest and that continues to accelerate. I think we normally get a slower ramp to work down the [inaudible], but this is kind of - the switchover to new products is faster than we expect, which is actually a very, very good trend, especially in this environment. The issue is it just shifts the margin structure, because normally you get a quarter or so to sort of work that in, and we have to work it in right out of the gate. And so we feel very good that we can work to improve the gross margins. And like I said on the last call, we have a substantial number of new indirect revenue sources from the BlackBerry platform which you’re going to start to see coming into gear. So the margin structure shifted because of the new products. We believe we can improve the costing of these, which is very traditional. We don't believe - there is no special pricing reductions on volumes that we have right now. And it's fairly generic across regions, you know, subject to volume, the margin structures around the globe.

Just a clarification. Part of my question was I would assume that you built in volume discounts if carriers exceed certain volumes on sales of the devices, and I'm wondering since you saw such a strong success, would that success trigger price discounts sooner than you expected?

No.

Your next question comes from Rob Sanderson - American Technology Research.

It's been awhile since you had an update on the expectations for your monthly service revenue. In the past you've talked about range, how they're different between [inaudible] and biz and what the higher ends and lower ends of those ranges might be depending on volumes. Do those historic ranges still apply and you're trending to the lower end over time or are we looking at new low ends for those ranges on your monthly recurrings?

I mean, I think, you know, those ranges, as we talked about before, some of those had thresholds built in that when carriers passed a certain threshold, you know, in the size of their subscriber base, there would be discounts on what the monthly rate was. I believe Brian said in his comments that, you know, monthly ARPU on a blended basis is just down slightly this quarter, and that's been pretty much what we've been seeing over the past several quarters. And that's really driven, you know, as much by shifts in the product [inaudible] in the subscriber base towards non-enterprise as anything else. You know, we have introduced some lower tiered plans in certain markets, you know, where we get a lower monthly fee, but that's still part of that blended number. And when those users upgrade to a full biz plan, then it goes back into our typical 3 to 5 range.

Well, that's on the current period, but I'm asking more about what should we expect in the coming years as the volumes start to pick up again - you know, lower ends of those historic ranges we've discussed or do we see new lows on the low ends?

I think it depends on what, I mean, what timeframe you're talking about here. I mean, we're still, you know, not near the low end in most of those buckets today. You know, I mean, it depends on what your volume assumptions are going to be over the longer term, but I don't see this as something that's, you know, a near-term issue other than the normal declines that we've been seeing on a quarterly basis as a result of mix shift.

Got it. So, yes, I think trending as we've seen and no significant step downs because of new commitments with carriers.

Not currently. I mean, there's things over time that we may, you know, decide to do, but, you know, those would be things we'd communicate once they were in place.

Your next question comes from Chris Umiastowski - TD Newcrest.

I want to really just dig in a bit more on the gross margin line. The first question is, could you break out the margin that you're expecting on hardware? I think the way you break it out in your K is [inaudible] hardware and other, along with software and services being buckets. And I think the software and services has been about 84%. The hardware and other has been in the 40s and it looks like it's the major responsible factor for the big decline. Is it safe to say your hardware margin is now low 30s?

We don't, I mean, we don't break them out, as you know, to that degree of granularity. I mean, I think it's safe to say that the majority of the move down in blended gross margin is due to a decrease in hardware gross margin, if that helps you. I'm not going to give you any more.

Yes. And we also talk, I mean, Rob just asked about the ARPU, so I think that does clarify it and that's good. Maybe you could talk a little bit about how the Storm launch affected you in the quarter as well and how the continued success of Storm into Q4 is affecting your margins, because it sounds to me like you're saying it's getting introduced faster than expected, the margins are lower upfront and they usually get higher. I know in the past you've talked about how that happened with the Pearl. It seems interesting to me, like you're saying you could get the margins up in time, but you're also guiding into fiscal 2010 to be basically flat or slightly higher. I think a lot of people would have expected that if your comments were accurate about working the margin back up that you'd see quite a big change in margin in 2010 towards the upside, and I'm wondering why we're not seeing that in your commentary.

Your comments are very fair, Chris, and really, we're in a time of great upheaval really in the global economy, so what can we bring to the table with very level high levels of certainty? And what do we have really good visibility on and what do we give reasonable estimates on? At the core, we have very good visibility into our top line of Q4. And there are, on the certainty pieces, forget about potential things, where they're often very positive things that happen with us because we're not introducing new products particularly this much as quarters, so we're not facing that kind of change. So we're trying to communicate very high comfort on our opportunities on the top line this quarter, which is really a remarkable amount of growth given all the dynamics in the market that you've seen and from chips vendors into the wireless and all the different players. As well, as I said on the last call, this is very much a bit of a land grab phase going on in the wireless market, and we're very, very pleased with the adoption of our products and the leadership position we have and, in many respects, the leadership position we're extending. And these are things we know. The other thing we know is that traditionally we've worked down costs over time, and we seem to have some early positive indicators on that. The other thing we've indicated is that there are some new revenue streams coming in on the BlackBerry platform which we're working diligently on which are very complementary, not the least of which is the ap store, but many other things that help our business. So I think one could, you know, we obviously aim to enhance the margin. I believe there's opportunity there.…

I just want to finally make sure in the margins that we understand co-op marketing. Can you explain how that affects your accounting?

Well, it's co-op marketing, so it's sales and marketing expense. Rebate activity would be in cost of goods sold, and ASP.

Your next question comes from James Faucette - Pacific Crest Securities.

I just wanted to ask a follow up question on the products, one in reference to the question, I think, from Maynard in terms of the Storm. When does the window open that we could start to expect that product to end up at other carriers outside of Verizon and Vodafone or perhaps a product like that, firstly. And secondly, when you talked about that there were more than or the best of an expected transition to new products and also seeing a bit of economic hit on the legacy products, can you just give your guess as to as far as the shortfall for the November quarter, what portion was attributable to the economic environment and, if you had to guess, what portion was attributable to the delay [break in audio]?

A very fair comment and this is my sense on it. I think the shortfall in subscribers was half and half, but I think principally the revenue was - I would give a much stronger proportion to the delay in the products. The way, you know, otherwise, why are we just rocking it out so strong in December and with orders so stuffed in January, February? The economic climate, if anything, has tightened. So we didn't know at that time, you know, but once - so we guided based on what we knew. But the results of the new products and the strength in December has been, I mean, we can't be more delighted, really. So you have to say that it was principally delay in new products. I mean, you look at the products we introduced. It was a flurry of new products. And what happened is you get an overhang, you schedule launches, and the channel holds off existing products for purposes of all the big push, and when you lose two to four weeks, that chunks right out of, you know, if you do the time under the curve of adoption of an adoption curve, the calculus of it is you lose a fair bit of volume just on those last couple of weeks of a quarter just based on how you're to ramp. And we're running that. So I would give a disproportionate weight to the delay in products, though that didn't explain the reduction in subs in October, which subsequently responded very nicely in November and very nicely in December. So I think the sub thing was more an economic thing, in my view of it. But the overall top line was much more of a product delay. But what happened - and you asked…

And I guess just, if I could, just to clarify, then, on the Storm, I mean, you do expect that product or similar products to be at other carriers? I mean, any sense as - can you give us a more specific in terms of dates for that?

I can't comment on specific stuff, but it's a very deep and special partnership worldwide with Verizon and Vodafone, and we also create special partnership with other carriers, respecting our commitments to others. So I just can't talk particular. Some aspects are very special to some and others, but each carrier is coming out with very special roadmaps, and you're going to see, you know, I think there's a real heartbeat. Though there's interesting things in the first half of the year, I think we're going to really ride these products for awhile, and you're going to see a remarkable cycle into the autumn of next year slingshotting off of what all these new products is going to give us in the first half.

Your next question comes from Jeffrey Kvaal - Barclays Capital.

Jim, Edel, Brian, could you help us understand if there are any one-time factors that are involved in the unit forecast for the fourth quarter? Like are there pushouts from November or is there a destocking in the inventory of the distribution channel, anything along those lines?

Nothing that I know of. No, this is flow. This is flow.

And then secondly, CapEx, $250 million a quarter, plus or minus. Is that going mostly to the [inaudible], to the new buildings? Do you expect that to continue? How should we think about that?

Yes, Jeff, it's primarily [inaudible]. I mean, there's parts of it going to, you know, IT-type stuff and to the network operations, but the biggest piece of that is still facilities.

Okay, then should we expect that to slow in fiscal '10?

I mean, it's tough to guide out that far. I mean, it can be very lumpy and things can slip from one quarter to the next. I wouldn't be forecasting dramatic decreases.

And then on the gross margin element, should we be expecting the 3G mix to be increasing in fiscal '10? I mean, I would imagine yes. And, if so, where are the levers that you can pull in the new products to improve the margin?

Yes, that's a very fair question. The 3G mix is clearly intensifying, though a lot of the rest of the world is still very interested in Edge and Edge evolution, so it's sort of using Edge as a 3G evolution off of a [inaudible] chipset, so they're lower cost. But I think you'll see a trending towards 3G. I think it's clearly lower componentry costs, really. I mean, these products, these high-performance 3G products are dramatically more expensive to build currently. And it's been our tradition that when we enter these things, they're expensive and you've got to work them down, and I think we've got to work it down. And I think that's inevitable. It'll work down; to what degree and what percentage is a good question.

Other handset vendors haven't talked about lower gross margins on 3G, though, Jim. Is there something specific that's going on with you or they may be able to hide it with greater volume?

I don't know. If you look at the rest of the cellular phone industry, we've seen some margin guidance that you can really reflect on a little bit. I don’t think we're in any - I think whether they say it's competition or whether it's cost based on it, you know, I think you have to realize that we're in that high-end segment and we've got true leadership in that area. And, you know, I don't know. I mean, you can talk about the other ones. I mean, all I can say is I know the cost to make these hot new products with the displays and the componentry and the processors and all you get out of them, and they're selling great and they love them. They currently cost more than the established Curves and Pearls, but those products we worked down over time on their cost, too. But what I would say is we've never seen such a shift in mix to new products so quick. That’s the part that sort of caught me. I didn't expect the adoption to be so strong so fast. So it's an evolution that's very, very quick. So it tells me the industry's in rapid transition right now, rapid transition to the platform imperative and the performance imperative of these smartphones, and the more, you know, broad deployment of smartphones, but that has lots of consequences. But there's rapid transition and we're being really taken through a leadership position in that stuff, and it's putting some flux in our normal trends. But overwhelmingly the trends are positive, but one of them is the devices cost a little bit more to make and the shift from old to new is faster than we expect and that's caused some shifts in the model but, you know, in this period of time. But we see a lot of ways to enhance that, and I've tried to give you two. But it'll play out.

Your last question comes from Scott Coleman - Morgan Stanley.

Jim, I'm wondering if you can help us understand what percentage of units this quarter were from new products and also help us understand what's going on with some of the older products as well? How are carriers and consumers using the new products differently than the old products? Is it helping drive ARPUs higher or is the demand more from better screens, better cameras, but not necessarily driving data ARPUs higher for the carriers?

Sure. Well, I don't have the specific percentage of new products, but I would say it's over half what we're running now. I mean, in terms of this quarter. A lot of those products were coming in later in the quarter. However, it is important to know that the Curve is still the number one selling cell phone in the United States, so it's still selling very, very well, and Pearl is doing well, too. But what we're going to see - what we're seeing at the end of the quarter and in December are really strong just new streams of Bold and Storm, which take up over half the units. But that's why our top line's growing so well, even in a very prudent case that we're offering now. So it's a very quick, you know, out of the gate, basically, transitioning to well over half the sales new products.

Right and I understand that, but I'm trying to understand if from our perspective if users are using the new devices differently in a way that's helping the carriers garner higher ARPUs themselves?

Yes. No. And I sort of figured that was the second part of the question. I only got the first part of it. And so if I got the first part - which I hope, I think I did - on the second part, there is a rapid shift in how people use these devices. You know, in essence they came out that some people sort of saw these as a music synch devices, and BlackBerry had a lot of messaging lineages. Now what's happening is multimedia and messaging and rich [waves] are there and Web 2.0 is there. So we gave some indications of the rapid adoption of wireless social networking. Like that is becoming the new way in many respects. You know, all these, you know, these new search and GPS apps. So are carriers getting, I mean, you know, are carriers making more money per user? My dealings with carriers is that they like making more money per user; the greater players, its deeper penetration of voice data relationships and their base. So would they like to make more money on the people currently on data? Sure, of course, and they have strategies to do that. But principally this is about cutting over the smartphone with the data relationship to mainstream. And BlackBerry, as you see by the ads and promotion and the nature of net new subscribers on Storm, I think we're a principal catalyst of that cutover in very, very early stages, where we can't keep product on the shelf. So what does this mean? It means that people say, you know, I carry an Internet appliance on my belt. I carry my social networking, messaging environment on my belt. I carry my Internet surfing. I carry a multimedia machine, where I can, you know,…

Ms. Edel Ebbs, there are no further questions at this time. Please continue.

Thank you. Just before I finish out, I just want to clarify a point on my response to Chris Umiastowski's question on co-op marketing. So rebates actually go through - show at the ASP and flow through revenue, not through cost of goods sold. In closing, I would like to remind everyone that there's a post-use service available at 4166401917, Passcode 21252987#, or you can listen to the call, which has been recorded and archived on our website at www.RIM.com/Investors. Thank you very much.

Ladies and gentlemen, this concludes the conference call for today. Thank you for your participation. Please disconnect your lines.