Ladies and gentlemen, thank you for standing by. Welcome to Research in Motion's Third Quarter Fiscal 2012 Conference Call. [Operator Instructions] I would like to remind everyone that this conference is being recorded today, Thursday, December 15, 2011, at 5:00 p.m. Eastern. I would now like to turn the conference over to Mr. Paul Carpino [ph], Vice President, Investor Relations. Please go ahead, sir.

Thank you. Welcome to RIM's Fiscal 2012 Third Quarter Results Conference Call. With me on the call today are Jim Balsillie and Mike Lazaridis, Co-CEOs; Brian Bidulka, CFO; and Edel Ebbs, Senior Vice President, Investor Relations. After I read our cautionary note regarding forward-looking statements, Jim and Mike will provide a business and strategic update. Brian will then review the third quarter results, and Edel will discuss our outlook for the fourth quarter of fiscal 2012. We will then open the call up for questions. This call is available to the general public via call-in numbers and via webcast in the Investor Relations section at rim.com. The webcast includes supporting slides that can be viewed through your personal computer or your BlackBerry PlayBook tablet. 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. [Operator Instructions] Some of the statements we 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 our expectations and estimates with respect to product shipments, revenue, gross margin, operating expenses, CapEx, depreciation and amortization, earnings and sell-through for the fourth quarter and beyond; our expectations regarding RIM's tax rate for the fourth quarter; our product development and marketing initiatives and timing, including our expectations relating to the BlackBerry PlayBook operating system 2.0 software and our BlackBerry 10 smartphone; our plans and expectations relating to our organizational and technology transition; our plans and initiatives to improve the performance of the business, including our marketing initiatives; developments relating to our carrier partners and other statements regarding our plans, objectives and expectations. We will indicate forward-looking statements by using words such as…

Thank you, Paul. The last few quarters have been some of the most trying in the recent history of this company. As you know, we are in the process of completing the largest platform and organizational transition in the company's history. And while we have remained solidly profitable and delivered significant unit volume during this transition, we recognize that our shareholders may feel we have fallen short in terms of product execution, market share and financial performance. That being said, we continue to believe that our transition will better position us to deliver enhanced value to shareholders and enhance our leading position in the mobile communication space. It is important for you to know that Mike and I, as 2 of RIM's largest shareholders, understand investor sentiment and we are more committed than ever to addressing the issues at hand. To further demonstrate our passion, alignment and commitment to RIM's long-term success, both Mike and I have asked the Compensation Committee to make a change to our cash compensation, such that our salaries will be reduced to $1 per year effective immediately. As part of our commitment to evaluating ways to improve the performance of the company, we will be reevaluating our product portfolio, operations, manufacturing and R&D strategy. We plan to introduce new devices into the smartphone and tablet markets, as well as products and services that better leverage our global cloud infrastructure and unique capabilities within the smartphone market. Today, Mike and I would like to share with you some of the steps we are taking and plan to take to address some of the key areas. We're evaluating a broad range of initiatives and strategies with respect to how we introduce products, the efficiency of our operations and what is the best organizational structure for the company.…

Thanks, Jim. First of all, let me reiterate what Jim said regarding our commitment to completing this challenging transition and commitment to leaving no stone unturned when it comes to evaluating the business and determining the best ways to improve our performance going forward. Despite being delayed, BlackBerry 7 smartphones are doing well in markets around the world, and hardware revenue is up 56% outside of North America. Since this launch, 8 new BlackBerry 7 products based on our Bold, Torch and Curve families were introduced throughout our global network of carrier partners. To date, we have achieved 1,450 technical acceptances across 400 carriers globally. The Bold 9900 is considered by many to be the best communications device on the market today. With its industry-leading keyboard, responsive high-resolution touchscreen and high-speed browser capabilities, it has been successfully launched in 57 markets around the world. The highly successful Curve family is also being expanded with the addition of 4 new BlackBerry 7 Curve products around the world. It is early days for BlackBerry 7, and we expect that the significant marketing and promotional programs we are planning around the product will help drive consumer awareness of these products and drive demand and sell-through in calendar 2012. With respect to PlayBook, we took an inventory-related charge in the third quarter of approximately $485 million. As a result of the promotional programs we recently launched, we've worked through most of the inventory in the channel and are replenishing channels to support holiday demand. We've seen a significant increase in sell-throughs since the launch of these programs, and we expect this trend to continue with the launch of PlayBook 2.0 software in February. We're committed to the BlackBerry PlayBook, and it's an important aspect of our longer-term smartphone and mobile computing strategy. While we…

Thank you, Mike. Revenues for the third quarter of fiscal 2012 was $5.2 billion, a 24% increase from the second quarter. Q3 revenue also reflected a negative impact of approximately $50 million as a result of the October service interruption. Sales outside the United States, United Kingdom and Canada represented approximately 61% of total revenue compared to 56% in the second quarter. Some of the larger markets comprising the other segment in the quarter were Indonesia, Saudi Arabia and South Africa. U.S. sales declined in Q3 and represented 20% of total consolidated revenue compared to 27% in Q2. Revenue in the United States was weaker than expected due to slower than expected sell-through and delays in launch dates of certain BlackBerry 7 smartphones, resulting in a mix that was more weighted to BlackBerry 6 handsets than we had anticipated. Sales in the U.K. represented approximately 11% compared to 10% in the second quarter, and Canada represented the remainder. RIM shipped approximately 14.1 million smartphones in the third quarter. In the first 9 months of fiscal 2012, approximately 38 million BlackBerry smartphones were shipped compared to 37.5 million in fiscal 2011. In Q3, we also shipped approximately 150,000 PlayBooks during the quarter, and sell-through to end customers, based on RIM's internal data, was higher than this. Since the launch of the new promotions across consumer and enterprise channels in the United States and Canada late in the third quarter, the company has seen a significant increase in demand for the PlayBook. For the first 9 months of fiscal 2012, approximately 800,000 PlayBook tablets have been shipped. Hardware revenue was approximately $4 billion or 79% of sales compared to $3 billion or 73% of sales in the second quarter. The 35% sequential increase in hardware revenue was primarily driven by new devices…

Thanks, Brian. Before I discuss the outlook for Q4, I would 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 disclosed in our public filings. The fourth quarter unit outlook continues to reflect the rapid changes in the competitive environment, impact of the platform transition we are going through and the service outage we expected -- we experienced in October. While we plan to invest heavily in new marketing programs in Q4, the impact of these activities are not expected to benefit Q4 sell-through. Based on these factors, we expect sell-through in Q4 to be similar to Q3 levels, resulting in a higher level of inventory in the channel than we anticipated. As a result, we expect to ship between 11 million and 12 million smartphones in Q4. We expect revenue in the fourth quarter to be in the range of $4.6 billion to $4.9 billion, and we expect service revenue to be stable to slightly higher in Q4. We expect gross margin in the fourth quarter to be up slightly to approximately 38%. This is higher than Q3 because the PlayBook inventory provision impacted Q3 gross margins, and we expect more BlackBerry 7 products in the mix in the fourth quarter. Total operating expenses are expected to increase by approximately 14% in Q4, and we expect Q4 diluted EPS to be in the range of $0.80 to $0.95 per share. The decrease in EPS reflects lower device revenue driven by promotional activities and the increased investment in marketing that Jim and Mike referenced earlier. We expect to invest approximately $100 million in marketing, advertising and loyalty and retention programs in the U.S. market in the fourth quarter. We expect this high level of investments to continue throughout fiscal 2013. While we expect the cost savings in the Core program Mike referenced earlier to offset much of the increased marketing spend over time, we do expect the ongoing transition to create earnings pressure over the next fiscal year. That concludes our formal remarks, and I'd now like to ask the operator to open up the call for questions.

[Operator Instructions] And your first question today comes from the line of Rod Hall of JPMorgan. Rod B. Hall - JP Morgan Chase & Co, Research Division: Guys, I wondered if you could give us a little bit more color on the BB10 smartphone delay. You said that it was mainly chipset-related. Was that a fairly recent update that you got from the chip manufacturer that, that chip was going to be delayed? Or can you just give us some idea? Because it sure seem like at DevCon you thought that you'd be able to deliver devices sooner. And I've got one follow-up to that.

We've decided to use a highly integrated chipset that's not available till the year in production. So we've designed -- we've been using that chipset so that we could have a much more aggressive industrial design to the product and better power and efficiency. And because of that and just making sure that we had to import that new platform, we've experienced a delay. Rod B. Hall - JP Morgan Chase & Co, Research Division: And Mike, is that related to -- I mean, it kind of sounds like maybe you were finding you weren't getting the kind of power efficiency out of the software that you wanted to and you needed to go to a more power efficient chip. Or can you just give us some idea why the -- it seems like the delay was related to a chip decision that maybe you made rather than a delay on the part of the chip manufacturer. So can you just give us some idea what happened there?

We decided that we wanted to target a higher efficiency, lower power consuming, more integrated chipset for LTE products in the U.S. The BlackBerry 7 products are doing really well around the world. We wanted to make sure that the product we launched in the U.S. had the performance and battery life expectations our consumers are going to be expecting with BlackBerry products on LTE. Rod B. Hall - JP Morgan Chase & Co, Research Division: Okay. And then what are you doing about developers? I mean, the developers are kind of expecting, I think, to see the BB10 stuff earlier. You guys -- is there some sort of strategy for keeping people on board for this additional period of time while they wait for the new devices?

Well, as we've mentioned in the past, developers developing for the PlayBook environment, that work that they're doing is directly transferable to the BB10 platform and BB10 smartphones. We're also working on developer phones for the developers so they can start testing their applications in real life and start experiencing the platform, experiencing how it works, the seamlessness of the performance.

Your next question comes from the line of Ehud Gelblum of Morgan Stanley.

First, a clarification and then a question. Now that you -- Edel, now you've written off your PlayBook inventory. As you sell PlayBooks, I'm just curious how that runs to the P&L. Do we get revenue but we don't get cost against it? Just understanding how that works and if that's impacts margin going forward, but that's just kind of a technical question. And bigger questions, can you give us a sense as to -- of the almost 75 million subs that you have, how many of them are still in the U.S. and possibly how many of them are in Europe? And then of the 14.1 million BB7 -- I'm sorry, of the 14.1 million BlackBerrys you sold last quarter and the guidance of 11 million to 12 million, can you give us a sense as to how many of those were BB7 this past quarter and how many you expect to be in the 11 million to 12 million next quarter?

Its Brian. I'll take the first question. So with regards to the PlayBook provision, it's really a valuation adjustment to move the inventory cost to what we considered we'd be able to recover on it. So while we will get the revenue on the shipments in the sell-through that we're driving, there will be an associated cost for that. So the gross margin dollars will generally be very nominal, and the expectation on our gross margin percentage is about 1% in our estimate for Q4.

Ehud, we don't break out geographic subs. I mean, we did give you a little bit of color on the call there, just saying that we did see decline in the U.S. And so the growth that we're talking about is outside the U.S.

Sure. I was hoping just trying to get a sense as to how many subs were left in the U.S. Can you give us a sense as to how many BlackBerry 7 phones actually shipped through this past quarter? And then if you're expecting the same 13 million sell-through next quarter, why is the guidance 11 million to 12 million? I would have thought it may be higher at least in line with that number?

Right. So again, Ehud, I'm not going to be able to break out the BlackBerry 7 percentages for you. We do expect BlackBerry 7 shipments to be higher in Q4. In terms of the guidance number, and I don't know if Brian maybe wants to take this 1 as well. But I think if you -- we talked about there being more channel inventory because the sell-through is lower than expected. So that's the primary reason for why the shipments are lower. We're just working through some of the channel inventories...

And we're basing that current sell-through based in our current expectation, and that's the reason why we're using the 11 million to 12 million unit number.

And your next question comes from the line of Tal Liani of Bank of America Merrill Lynch.

First, just a clarification. When you said that you expect stable to slightly higher quarter-over-quarter in the services, do you refer to the $970 million plus $50 million, or do you refer to the $970 million? Is it before or after the adjustment?

It was on an adjusted basis.

Adjusted basis. Okay. So that means $970 million, right? The question I have is on the PlayBook. At what point do you kind of give up? What needs to happen for you to give up and say maybe I can use my resources better in a different way or a different place? And if you give up, does it mean that you save a lot of money? Or are most of the R&D costs shared are shared between this and QNX, anyway QNX devices so then savings is not that great?

Obviously, it's the same platform, which is great because it's the same platform, whether it's a tablet or a smartphone or even a car installation and you know that we have -- we're in over 235 car makes and models around the world with QNX. So that provides us a really strong base to build on. It gives an opportunity to spread that R&D across all mobile platforms, in all 3 mobile platforms. I still think the tablet market is in its infancy and it's rapidly evolving. I think we're seeing -- we're really, really pleased with the increased demand with the PlayBook promotions. We're growing that PlayBook installed base. It's the same platform, which gives us more -- our developers more incentive to support the platform, get ready for the BB10 smartphone. So no, we're completely committed to the PlayBook.

And just to clarify on that $970 million, that was the GAAP numbers, so the adjusted would be up to a higher number.

Your next question today comes from the line of Richard Kramer of Arete.

I have a couple of questions. One is, given the shift of the business to Latin America and Asia and with some of the new Curve products not being very low end, how do you think about your future growth in emerging markets? Are you going to have a portfolio of very low-cost handsets? And what does this mean when you look at the organization for how you have to shift your resources maybe out of developed markets and in developing ones? And then I have one follow-up.

Well, that's a fair question, Richard. And yes, there's a very powerful opportunity at the entry level as you say. But that also exists in just about every market in the world because some of the most sophisticated markets in the world are still over 1/2 on feature phones. So we see that, that has -- that is a really important opportunity for us going forward is to capture that entry level in the BB7 products going forward.

And then a question on this Core program and how you're running the business. There's still a fairly high level compared to peers of inventory, receivables, et cetera, general working capital through the business. Do you think you can make a meaningful reduction in that and squeeze substantial cast out of the business in the next 12 months? Or should we assume that all of that, anything that you squeeze out will be reinvested in the marketing programs that you mentioned?

Yes, there's many aspects to the overall Core program including material sourcing, procurement life cycle management, indirect sourcing, discretionary spending. So we're looking at a lot of aspects of our cost and efficiency. And as Mike had mentioned, we've got cross functional teams working to drive these various initiatives. And part of the program is to look how we can reinvest those savings into driving additional marketing and advertising.

Your next question comes from the line of Mark McKechnie of ThinkEquity.

So just a couple of questions. On QNX or BlackBerry 10, this is either for Mike or Jim, how much are you going to be changing on the infrastructure side on your BIS and your NOC? And then along with that, if you could talk about plans to either support other devices directly connecting to that, or about the ability of the QNX to run applications from other areas. And then I have a follow-up.

The QNX environment, the PlayBook 2.0 software with its native e-mail and contacts and calendar will be able to interface to BlackBerry Enterprise Servers, but it will also be able to interface to a lot of other services that we currently support. So I think one of the things -- I don't think we've really talked about how we're doing that. That's part of our secret sauce. But it does play right into the security that we have, the efficiencies that we have, and it's something that I think -- and I know that our enterprise customers are quite excited about because they're able to reuse their investments in the BlackBerry Enterprise Server and systems.

And to answer that, I mean, fair question on what our infrastructure can do and as part of the comprehensive assessment, we're looking at ways to leverage our strength in the infrastructure in a broad set of services to the marketplace. And so this is part of the comprehensive view. We see our cloud infrastructure as a competitive differentiator. You've seen the Mobile Fusion launch, you've seen the NewBay acquisition and this is something that is a Core part of our assessment to leverage our strengths.

And your next question today comes from the line of Jim Suva of Citi.

There was some commentary on the prepared remarks about some additional EPS pressure. I'm just trying to understand, was that just simply referring to year-over-year EPS pressure? Or with the OpEx ramp next quarter, should we actually expect earnings per share beyond February to kind of sequentially even trend lower or is February kind of the bottom?

Yes, Jim, we're not giving a whole lot of guidance right now. I mean, we're giving you as much color as we have visibility into at this point to give you some idea of the trend, but we're not prepared at this point to give any more detailed guidance.

Okay. Then if I could as a follow-up, on the OpEx, I believe you said up $100 million quarter-over-quarter and that's mostly related to advertising, if I heard that correctly. And then there was a comment about some royalty retention. Can you just help us understand what that royalty retention is? I'm not familiar with that language.

Yes, that was loyalty retention actually, Jim. That's our loyalty and retention program, yes, to keep our loyal customer base in the U.S.

Yes, and that $100 million isn't necessarily all OpEx, so there are other aspects to that. But you could see the comment was that we are investing in our results -- our Q4 estimates do have $100 million factor in there for that.

And finally, when are you finished with your restructuring efforts?

I believe we've already talked about our restructuring efforts, but the Core program is not about personnel or employees. It's about processes and efficiencies in the system and how we do things.

And it really is just a continuous comprehensive review of our business as we mentioned earlier on the call, and this is absolutely not business as usual at RIM. We're going to do what it takes to get the value for shareholders in the company, and we're totally redoubling our efforts on the execution here. So the Core is really a comprehensive aspect of assessment of all aspects of the organization.

And your next question comes from the line of Stuart Jeffrey of Nomura.

I have a question with regard to BB7. It sounds like you're not particularly happy with how that trended or been accepted in the U.S., even allowing for some of the product launch delays and you're talking about picking up promotional campaigns, advertising and things like that. And yet your gross margin guidance is 38% for the coming quarter, and the PlayBook seemingly has had lots of success through price cutting. So could you please explain your thinking around price cutting around the BlackBerry portfolio and why you're not being more aggressive over the next couple of quarters?

Jim -- sorry, Stuart, that's fair to talk about, and we are certainly not satisfied with the situation in the U.S. market. And so we are absolutely planning a comprehensive set of marketing, advertising and promotional plans. And you're going to see that happen imminently. Yes, we talked that outside the United States, our hardware revenue grew 56%, and we believe the BB7 products are excellent products for the market and we're excited with a broad number of certifications, several dozen very late even in November around the world. And we plan to be very, very aggressively promoting the BB7 value proposition to customers in the United States.

So does promotion mean advertising, or does it mean price cuts?

It means there'll be special offers, there'll be advertising, there'll be special marketing campaigns, a very comprehensive set of activities.

Your next question comes from the line of Amitabh Passi of UBS.

I was just wondering with respect to your Core program, how do you intend to keep us updated? Would it just be on your quarterly calls? Can we expect to get intra-quarter updates on any sort of updates? Would love to hear just in terms of how you plan to keep us abreast of developments.

Yes, we haven't necessarily thought that through, but that's something that we can certainly get back on the next call with an update on how that's progressing. But that's certainly a focus for the organization, and so we can certainly provide an update next quarter.

And then just as a follow-up, you did 14 million units this quarter of phones. You're guiding 11 million to 12 million. Why is that ahead of BB10 that unit shipments don't get worse? I'm just trying to figure out what would potentially drive units even higher over the next 2 to 3 quarters.

The BB7 devices are really rejuvenating the BlackBerry experience around the world. I hear stories every day where people are commenting about how the BlackBerry Bold is the best communication smartphone in the world today, and that's something we're just building on and we're going to support that through marketing, advertising and promotion. I think that BlackBerry 7 is such an advance over our previous BlackBerry platforms. It really has changed the way people are perceiving the product. I mean, the browser is really fast. The touch screen is ultra responsive, and it's just the fit and finish material choice is amazing. So BlackBerry Bold is really driving the story forward for us around the world.

And yes, just -- I mean, we recognize we've not met expectations in aspects of our market share and performance. But our BlackBerry sub base has grown 35% to 75 million over the year. So there is a core value proposition to the product. It's very exciting in the U.S. and around the world. We plan a comprehensive set of marketing and advertising programs and we have to make sure we're executing with laser focus.

Your next question comes from the line of Jeff Kvaal of Barclays Capital.

First of all, can I ask what you've learned about the longer-term margin expectations that we can expect in the tablet market? Obviously, there's been a bit of a reset there and then some restructuring charges. So once all the dust is settled, what kind of margin structure might we assume?

Again, I mean, as we said before, we still view the tablet market as being in its infancy and it's rapidly evolving. We're very confident with the PlayBook's acceptance in the market through these promotions. So we know that there is a demand for the product, and people are really enjoying this premium experience that they're having today. With the launch of the PlayBook 2.0 software upgrade, that's a substantial upgrade that our customers have to look forward to. And then once that becomes part of the basic experience, that's going to be a major driver as well. So we see the PlayBook OS 2 enhancements being on track in February as a major milestone.

Okay. That doesn't really help us with the margin implication, but we'll see maybe when the new PlayBook come out.

Jeff, to really answer it, the industry is still in its infancy. And as some have said, it's very difficult to be in the smartphone business and not be in the tablet business. And with different packaging sizes, when does it cross over? So it is a business we're committed to, the BB10 we're committed to. We're excited about the future. We understand that we're in a transition, that we have to perform better in execution in all aspects we're doing. But we're not going to represent things that we don't have really high clarification on in the industry because the industry is -- the tablet market is very, very early still.

Your next question comes from the line of Kulbinder Garcha of Credit Suisse. Kulbinder Garcha - Crédit Suisse AG, Research Division: I just wanted to clarify on that previous question just with respect to the visibility or confidence of this marketing push you're going to make around BB7 will actually proves successful. The reason -- and here's my thinking and tell me where I'm wrong. Some of these BB7 products have been out for a few months now. They haven't sold necessarily as well, and the sell-through this quarter you're saying wasn't great. Next quarter, volumes go down because of some channel inventory. So with this marketing push maybe there's a recovery in the quarter afterwards, but some of the products will be quite old. The market is very competitive, and it's very rare in the mobile phone industry that if you don't get off to a good start in the first few months of the product that it actually sells very well. So I'm trying to understand why your volumes actually stabilized. So could you please provide some clarification there? And then just one question for Brian on the inventory charge or the charge around the PlayBook. So just to be clear, that you're just writing down your inventory on your books to a level whereby you can sell out these PlayBooks? I'm just wondering what happens when that's done. Then do we have another charge, or is there a level of profitability for PlayBook here? I'm just -- maybe I misunderstand it, but can you just give a bit more clarification around that?

Yeah, it's Brian on the PlayBook inventory charge. So that is a adjustment, as I mentioned, on the valuation based on our estimated -- our current estimate where we can sell-through that. So that's given the current inventory levels that we have and our expected price points and promotion activity. That's where we record that provision, and that's where the teams are driving to ensure that we sell that inventory through.

And your question on the BB7 sales, it is important to know that our hardware sales did grow 56% internationally in the past year, that we had dozens, literally dozens of certifications very late in November. So it's still early in the program, very early in the launch of this product, and the Bold is doing very, very well, is an example. And there was an earlier comment on marketing and how we do pricing and margins and promotions. So we believe there's an opportunity there. We're very, very excited about it, but of course, we're very, very focused on making sure we operate with excellence in these programs. We think it's very early, and we think these are excellent products for the market.

And your next question comes from the line of Matt Thornton of Avian Securities.

Two, I guess, points of clarifications. First, and I think I missed this prior comment, but in talking about PlayBook gross profit, I heard the 1% number. I'm not sure if that was a gross profit contribution number. But I guess my question is, as we look to the February quarter, what does guidance imply for PlayBook? Are we expecting volume growth given all the promotions? Or should we see sell-in growth given that the charge is now out of the way? Should we actually see positive gross profit contribution? I guess any color around that will be very helpful. And then secondly, I think last quarter we had talked about smartphone gross margin likely rebounding a bit in the November and February quarter as these products age or some of the new higher ones have launched. Should we still expect smartphone gross margin to improve here directionally? And I guess any color around directional ASP on smartphones would be helpful as well.

It's Brian. I'll take the first one. So what I had mentioned was that the effect on our current estimate of sell-through and sell-in for PlayBook in Q4 is 1% on gross margin percentage. So to the effect that we've got revenue and cost related to -- and I'd mentioned that generally that those 2 would more or less offset and that the impact would be about 1% on our estimated gross margin percentage.

And Matt, we had talked about the reason why gross margin was going to be higher in Q4. Some of that is because the BlackBerry 7 products are going to be a bigger part of the mix, so that would imply, obviously, there's a higher margin there.

Ladies and gentlemen, we have a time for one more question today, and that will come from the line of Tavis McCourt of Morgan Keegan. Tavis C. McCourt - Morgan Keegan & Company, Inc., Research Division: A clarification, Brian. It looks like there was a $374 million purchase of intangibles in the quarter. Am I right in that? And if so, what was it? And then my question is for Jim. The last 2 quarters, the service revenues are up, the subscriber base is up and yet handsets are down. The only logical conclusion I can draw is that the base of subscribers is not churning as fast as perhaps many of us feared. Is that a fair assessment? And if so, is it in specific verticals, enterprise or specific geographies where you're seeing that?

Sure. It's Brian on the intangibles. That relates to payments for certain license agreements.

To answer your question, I mean, I'm not going to try and paint anything that's overly rosy or anything that's overly pessimistic. Yes, we have a very strong base of 75 million BlackBerry subscribers. Yes, we do $1 billion a quarter in our cloud services revenue. And so we are seeing lots of growth in subscribers. We're seeing lots of growth in traffic. BBM's growing, and that is a core area for us to leverage our strengths going forward in new types of programs and new types of plans for both our consumer and enterprise space, which we're seeing growth in that, but also in different regions around the world. So yes, there's a very, very powerful system that we have here, and it's up to us to make sure that we use that infrastructure in a way and execute well to make sure that we create value for our shareholders.

Thank you, operator. That's all the time that we have today. I'd like to thank everybody for joining and let everybody know there is a replay available on our website. Thank you.

Thank you. Ladies and gentlemen, this does conclude the conference call for today. We thank you for your participation, and you may now disconnect your lines.