Welcome to RIM's fiscal 2010 first 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 the review first quarter results and I will discuss our outlook for the second quarter of fiscal 2010. We will then open the call up for questions. 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 before 6:00 p.m. Eastern Time this evening. 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 revenue, gross margin, operating expenses, CapEx, depreciation and amortization, investment income, earnings, channel inventory, seasonality, ASPs, and foreign exchange related matters for Q2 and beyond; our expectations regarding RIM's near and long-term tax rates, as well as the effect of changes to Canadian tax laws; our estimates of the number of net subscriber account additions and other non-financial estimates; our efforts to manage operating expenses and reduce costs; our product development initiatives and timing; developments relating to our carrier partners; and other statements regarding our plans and objectives. We will indicate forward-looking statements by using words such as expect, plan, 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 to risks and uncertainties and assumptions we have made. Many factors could cause our actual results, performance or achievements to be materially different from those expressed or implied by our forward-looking statements, including risks relating to the uncertainty of general economic conditions, risks relating to our intellectual property rights, our ability to enhance our current products and develop new products and services, our reliance on carrier partners and third-party manufacturers, third-party network developers and suppliers; the efficient and uninterrupted operation of RIM's network operations centers; risks associated with our international operations; foreign exchange risks; risks relating to competition and other factors set forth in the risk factors and MD&A sections in RIM's filings with the SEC and Canadian Securities Regulators. We base our forward-looking statements on information currently available to us and we do not assume any obligation to update them except as required by law. I will now turn the call over to Jim.

Thank you, Edel. We are pleased with the strong results for the first quarter of fiscal 2010, with revenue of $3.4 billion, up 53% over the prior year and adjusted earnings per share of $0.98, slightly higher than we forecasted on the last conference call. Throughout the quarter we saw strong, ongoing support for our approximately 475 carrier and distribution partners around the world; we announced a number of new products, including BES 5.0, and BlackBerry Tour; we hosted the eighth annual wireless enterprise symposium and made dramatic progress in the penetration of new market segments. Approximately 3.8 million BlackBerry net subscriber accounts were added during the quarter, up 65% from the same quarter last year and in line with expectations. BIS subscriber base has grown steadily over the past couple of quarters and in Q1 approximately 80% of net new subscriber account additions came from the non-enterprise customers. These customers now represent over half of the total BlackBerry subscriber account base. International markets, which tend to be more weighted to prosumer BIS plans, were strong in Q1 and we are encouraged by the growth we see in many regions, especially Latin America, Middle East, and parts of Asia. In addition, the first quarter can be seasonally lighter for New Edge net additions due to corporate customers starting new budget cycles in January and having made larger-than-normal purchases heading into the year-end. Similarly, the budget cycles for government purchasing peaked in the fall, which can have a positive impact on the enterprise business in the timeframe, given the large and growing presence of the BlackBerry solution in this market segment. Inventory in carrier channels continues to be lean and in some cases, we are seeing ongoing reductions in channel inventory levels. The absolute level of inventory in the channel at…

Thank you, Jim. Revenue for the first quarter ended May 30 was $3.42 billion, which was comparable to the $3.46 billion in the previous quarter and in line with the guidance we provided on the April conference call. Handheld devices represented $2.8 billion, or 81% of revenue during the quarter, down slightly from $2.9 billion or 83% in the previous quarter. Total devices shipped in the quarter were similar to that of Q4 at approximately 7.8 million units. Approximately 7.3 million new devices were activated in Q1, either for new customers or for replacements and upgrades, not including phone only sales. We estimate that four weeks of channel inventory and the absolute level of channel inventory at the end of Q1 similar to Q4. Jim mentioned carriers continue to keep lean levels of inventory in the channel and in some cases, continue to reduce the levels they are keeping on hand. We expect channel inventory at the end of Q2 to remain similar to Q1 levels. Device ASPs in the quarter were approximately $357, in line with guidance and lower than Q4 due to shifts in produce mix. Service revenue was $451 million, or 13% of revenue for the quarter, up $36 million from Q4. Monthly ARPU declined from the prior quarter as a percentage of non-enterprise subscriber accounts grew substantially and certain carriers achieved volume discounts. Software revenue was $62 million, or 2% of revenue. Other revenue, including non-warranty repairs and accessories, was $123 million, or 4% of revenue. Gross margin for the first quarter was 43.6%, in line with guidance we provided in April and higher than the 40% in the fourth quarter, due to reductions in raw material costs, as well as shifts in product mix, as we discussed in the last earnings call. Operating expenses in…

Thanks, Brian. Before I discuss our outlook for Q2, I would like to remind everyone that these forward-looking statements reflect management’s best current estimate and should be taken in the context of the risk factors listed at the beginning of the call and disclosed in our public filings. We are forecasting revenue for the second quarter of fiscal 2010 to be higher than Q1 in the range of $3.45 billion to $3.7 billion, with units shipped also higher than Q1 levels at approximately 8.1 million to 8.7 million units. This growth is being driven by the ongoing strong sell-through and net subscriber account additions, as well as the launch of new products during the quarter. As Jim mentioned, channel inventories remain quite low and we are not building in an expectation for these levels to increase meaningfully in the second quarter. We expect the ASP for the second quarter of approximately $345. This is lower than in the first quarter primarily due to the mix of products expected to ship during the quarter. Software revenue in Q2 is expected to be similar to Q1 levels. We are targeting net subscriber account additions for Q2 in the range of 3.8 million to 4.1 million. While we do expect to see typical summer seasonality affect weekly run-rates, particularly in July and August, we also expect to see some of this impact mitigated by the strength of new product launches, such as the BlackBerry Tour and new carrier promotions that are scheduled throughout the summer months. We are targeting gross margin for the second quarter to be similar to Q1 between 43% and 44%. Total operating expenses are expected to increase in Q2 by approximately 7% to 9% from Q1 levels. We expect R&D to increase by approximately 8% to 9% and sales,…

Thank you, Edel. Fiscal 2010 has gotten off to an excellent start and we are excited about our plans and prospects for the coming year. Strong market position of BlackBerry and the compelling value proposition offered by the BlackBerry platform to our carrier partners and end users will continue to drive our performance throughout the coming year. 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?

(Operator Instructions) Your first question comes from Keith Bachman. Please go ahead.

I wanted to see how you are thinking about the competitive dynamics, specifically against Apple’s recently announced phones and the low-end price point at $99. And then also how you are thinking about what impact on the share side that Pre may be having on the market. Thanks very much.

Well, I think -- and I mean, we’ve had lots of offers for the BlackBerry that have been free and $49 and $99 and buy one, get one free, so I think we’ve had very aggressive promotion through a lot of carriers and we gave some sense of that. I’m not one to really follow these other things. I mean, I think that was just a limited time offer for a year-old product, or I think that’s a year-old product, you know, to really keep things moving, not to overhang with the new announcement. So I don’t think it’s a big structural kind of thing or anything like that, and other products that are out there -- I mean, they might be new, so it’s kind of early to really tell anything. And we’re pretty focused on doing what we have to do, so I don’t really sort of fret those kinds of things. You know, we plan on [better] spaces opening up and the alignment with the value proposition, the strengthening, and the alignment with the carriers as key and we’re just seeing that our strength -- you know, we’ve really -- I think we’ve demonstrated a lot of surging strength in the last two quarters and I’m not seeing anyone here take their foot off the gas, so you can extrapolate as you wish. Next question.

Your next question comes from Jeffery Kvaal from Barclays Capital.

Thanks very much. I was wondering if you could talk about units. It seems as though many of us might have been expecting a few more units in either this quarter or the next quarter. Jim, could you talk a little bit about the replacement rate, given activation seems to be relatively high? And to what extent phones sold without a data plan factors into that? Thank you.

Well, I mean, I don’t think that’s a big, big part of it. One, I think we have a bit of a range there because there’s a pretty exciting line-up of stuff we’ve really got lined up for the rest of the year, with some pretty spectacular roadmaps. So it comes a little bit on timing and normally, there can be some quietness in the summer time, so the fact that we are where as we are and we can see it going higher, you know, really heading into the holiday season is really very, very strong. So I mean, you take what you’ve got but we are really bringing in a lot of new devices and it relies a little bit on timing at the end of the quarter, how much of it you catch and how strong its pushed but we feel -- I mean, the lineup really for the next 14, 15 months is spectacular and the engagement with the carriers is fantastic and with this consolidation in consumer electronics to the smartphone and the carrier being a services platform, which is our OEM strategy, we’ve got sector winds at our sail and so -- but you know, when obviously you are merging a lot of stuff and you are bringing new stuff, you sort of give your best you can. But I think we’ve -- the range is a little open just because, you know, if a lot of things sort of go right, it can go really well but it’s the summer time and -- but I mean, I think we are very pleased with where we are and what we are doing.

Does that suggest we should see the typical unit volume up-tick in the second half of the fiscal year?

Well, I think there’s a disproportionate amount of activity heading into the holiday season and you’ve seen what we’ve done each year as we surge more in the B-to-C but how the B-to-B, you’ve seen how that seasonally goes and you hear how our B-to-B is doing fine but our B-to-C is surging around the world, so -- I would hope that this evolution and position that we have sustains itself if we are able to execute. Obviously things got legs and I can say -- I’m telling you, the roadmap is exceptional, carrier alignment is exceptional. The power and capability of the services platform and the partnerships, which I talked a little more on the B-to-B today because we talked a little bit more in the B-to-C last time, has been remarkable and if this is this subsuming thing that’s going on where these things do sort of a dozen things that used to be different things in your life, and now it’s all consolidated, it’s all services enabling and it’s all going innovative. So it’s hard not to -- hard not to get excited.

Can B-to-B do better? Is that particularly depressed right now?

No, I think what’s going on with B-to-B is much more an architecture shift. I mean, that’s why MVS is so powerful in that the new MVS version is about making it a true synchronized PBX and the SAP stuff is very important because that’s the native services environment. You know, and all the WiFi for the FMC, and then the BES 5.0 is just getting out, so really it’s much more about seriously re-engineering work processes and so it’s much more about transformation of the working environment than hey, I had a cell phone before, let’s make it a smartphone now. So we’ve been doing some pretty heavy lifting there in the B-to-B for a couple of years and it’s a pretty focal area for it to shift, but -- you know, and our relationship with like the [Vias] and Ciscos, you know, we are working together, you kind of have to question, you know, synchronize this to your PBX, why would anyone need a desk phone anymore, you know? And FMC, WiFi, and wide area and then all of a sudden, it does very interesting things to the numbers. But we’ve got to catalyze that transformation. We’ve got to get the new CCX extensions in Cisco and they are working on it. I’m -- it’s going to happen.

Your next question comes from Mike Abramsky from RBC.

Thanks. Jim, consumers are clearly interested in touch screens in their richer mobile browser media apps and messaging, and it also seems that despite its higher bandwidth consumption, Apple is getting subsidies [and hero positions] from some of the carriers, maybe prioritizing those things. So I’m just wondering, how do you see your plans to address that market while preserving your legendary compression and battery life advantages?

Well, if you are efficient, like I mean, what we do is people know how we compress and they know how our infrastructure, you don’t have to pull all the time because we trace your dynamic IP addressing and we truncate chatty protocols, CCPIP protocols and use wireless [inaudible] protocols and yes, we have all kinds of different compression architectures for different sized messages because generally, you are compressing small messages. And so the bottom line of it is if you can take something that’s two packets and make it one, you double the battery life and you double the network capacity and you double the speed. And so it doesn’t matter what’s going on, efficiency pays huge rewards in a world of scarcity and I think you are seeing this scarcity issue is really rearing a pretty ugly head. And now, things that we have focused on, side-loading but still allowing over-the-air and really a very thoughtful rationing on a value basis of capacity at play, so I don’t see it changing. I think it’s like if I’ve got twice the efficient engine of the other guy, whether it’s a big car or a small car, I still get twice the efficiency. The big car may consume more gas than the small car but it’s still a fraction of the other big car, and so it’s on a relative basis and gas price matters and the packet consumption matters, and so in this stuff, we’re up on our multimedia side-loading over the air, the browsing’s enhancing and all of these things are going through rapid enhancement but we are still seeing tremendous focus on it and you’ve seen in the media, in the analyst community they are now realizing this has -- you know, paying attention to this has positive CapEx and quality of service elements to the carriers and the carrier CEOs I’m dealing with, they are seriously recognizing this. It’s becoming very strategic. It’s just like -- it’s like fuel efficiency in cars when gas prices go up. Everybody, fuel efficiency matters a lot more when the price of gas is up and when network capacity is getting tight, efficiency matters.

And you feel that you can involve the BlackBerry browsing experience to pay some of these competitive alternatives that are more bandwidth consumptive?

Oh, our browser -- like, when you actually look at actual Internet traffic and the part of that as we parse it out that goes to actual air link traffic, it’s remarkably efficient. Oh yeah, that’s the -- that’s part -- it plays even more. Like, what it does in terms of reducing, oh sure. I mean, if you just do browser tests and you know, of whatever and don’t look at the -- and look at the Internet traffic and then say show me the air link traffic with -- just with a packet meter, you’d be -- it’s a fraction. Now, it varies with different kinds of -- but many tests have shown it to be a very small fraction and like a multiple, a significant multiple. We’re not talking percentages. We’re talking multiple of difference, and again when scarcity matters, yeah, and we’re seeing that happen. We’re quite -- it matters, and the more people want to do and the more multimedia and the more browsing and the more gaming and the more messaging and social networking and LBS and advertising and e-commerce and all that, the more it’s going to matter.

Thanks.

Your next question comes from Jim Suva from Citigroup.

Great, thanks very much. A quick question for Edel and then a quick one for Jim -- Edel, when you gave your guidance, is it fair to say that that includes the recently announced Tour? And if so, does it include anything else that isn’t announced, or would that be additional? And then for Jim, when you mentioned, Jim, that gross margins to be in the low 40%, just to help us all understand the magnitude of what you mean there, if you are currently guiding the next quarter of 43% to 44%, is that in the realm of what you consider low 40%, or do you think we are going to see a step-down function to what many may consider say 40% to 42%? Thank you.

Jim, I think you are going to get me for both of those questions. Yes, the forecast for Q2 does include the Tour, which we expect to launch in the quarter. There’s also some other smaller bits of other products, but Tour would be the bigger piece in terms of new products in there. On the gross margin, I mean, we really haven’t changed what we’ve said. It’s really what we said at the analyst day as well. I mean, I think when we say low 40s, is really because we just don’t have that much certainty because there’s a lot of mix and all these other things, so I would say -- I would look at that as kind of the, you know, trying to give you a sense that that’s not going to be any worse than that, based on our current view of mix.

Okay, but 43% to 44% for next quarter, you don’t see anything structurally that would be a big step function? Because if we think about the low 40s for the full year, with two quarters behind us, this quarter, next quarter, you’d almost need to see a big step function down for it to come in the range of 40 to 42.

I think we’re talking more on a sequential basis, right? So like you know, I mean, if this is too -- it’s too hard right now to know what the mix is going to look like in the last couple of quarters of the fiscal year but I think we are basically saying in Q3, you know, we would expect low 40s to be the bottom and you know, as the possibilities and the same thing for Q4 as opposed to it being an average for the whole year.

Great. Thank you very much.

Your next question comes from Simona Jankowski from Goldman Sachs.

Thank you very much. Jim, I just have a question on the quarter, and then a longer term question. On the quarter, if I heard you correctly that 80% of your sub adds were consumer, that basket seems to -- sub add number on the enterprise side that declined a little over 30% on a sequential basis in terms of the new sub adds. And coming off of a record quarter of enterprise net new sub adds last quarter, when really we were in the depths of the recession, this was just a little surprising. You know, you did mention seasonality but when we look back, I haven’t really seen such negative seasonality on the enterprise side in the last few years. So just wondering if you can expand on what might have caused it. You know, I don’t know if the BES 5.0 transition or anything else might have played a factor.

Yeah, I mean, there’s a number of things I think going on. I mean, some of it is that, we talked about international as well, particularly emerging markets, contributing more to net adds this quarter, and they tend to be more BIS focused. So that was a factor. There is a seasonal aspect. I mean, sometimes it’s harder to break it out but I mean, I think that that is a factor. Beyond that, I mean, I think there’s really -- there’s a lot, as Jim talked about, I think the last question or the question before, some of the structural things going on as well, in terms of MVS and BES 5.0 as well. I think it’s a factor but I don’t think that there’s anything going on in the enterprise market that’s sort of a sustainable trend downwards or anything like that. I think we are very focused on --

I haven’t had anyone give me any of that sense directly. You know, Edel is talking in the aggregate but I have not had anyone give me that sense, that they are pulling back or they are dialing -- no, we -- there’s an architectural shift.

That’s kind of what I just want to get a sense of because it’s just kind of a very discontinuous data point, if you look at the last few quarters, and so if there’s just something that there’s some pent-up demand that we did not see in the May quarter because of BES or some other transition that we are going to catch up on in the August quarter? I mean, is that really your sense here or what -- I mean, I just struggle to see such a -- you know, what might explain such a big sequential drop that we really haven’t seen before.

I mean, the sales are good everywhere. The corporates are engaged. It could have been a little bit of slowdown for BES 5.0 as they are done it, but I don’t think so. I mean, they seem to be -- the B-to-Bs haven’t really sort of given any signal that they are doing anything but going ahead. Nobody is -- I haven’t gotten any data point that gives me any indication that anything is not -- you know, it’s just about planning major re-engineerings, major extensions. Nobody said gosh, you know, we’re doing less or we’re going slow. I don’t have any of those anecdotally and I am in the market a lot.

Okay. Thanks a lot.

-- to remember is that the last quarter, we saw a pretty good growth in the enterprise market. That was with sort of the -- you would have had the same question the other way, I think that the --

Yes.

-- you know, smooth sometimes, quarter on quarter as you would like to see but --

Yeah, no, that’s exactly right. I mean, the weakness we saw this quarter is what I thought we would have seen last quarter and we didn’t. And Jim, a strategy question, kind of longer term is you know, when you look at the operating systems in the smartphone space, you know, three of them are relatively new when you look at the android, the iPhone, and the Palm OS, and kind of true to consumer focus, very browser-based. And then the other three, including yours and Symbian and Windows Mobile are a little older and more file based. I guess the question for you is do you feel like your strategy is going to remain to have one unified operating system to address the enterprise and the consumer side of the business? Or -- and do you see that there’s any element of the enterprise side and the security, the policy management requirements of that, kind of holding up the pace of innovation or maybe the architecture that you need to implement on the consumer side to remain competitive with some of the newer operating systems out there?

Well, you know, it’s a good question but when you do these competitive analytics, you have to make sure you frame it accurately because if you mis-frame it, you may come up with proper analysis for the question but you may actually conclude wrongly because it’s not the right question. And so when you look at this, and here’s an example, when you really talk about OSs, I mean, is it really an OS on a handheld? I mean, it’s an application task handler, the real-time OS is underneath that with the radio codes, most of the core apps are built-in by the manufacturers. If anything, you’re interested in just how easy the tools are and how rich the tools are. That’s kind of the key element and these are not heavy apps and they are pretty easy to port across. So when you talk about OS, if you are going to talk about a parallel, it is the whole system and it’s what you connect to, it’s what you proxy to and what you interface to, so -- you know, people, they don’t say gosh, you know, I’m going to get that BlackBerry because it’s got J2ME on it. They really think in terms of apps, so you kind of have to discuss it at a system level to really get the OS because the OS is really about an OS that brings you to services and not just a point basis. And so it’s very different, because these are network appliances. This is not a distributed computing type of thing of the original PCs, so in essence, you have to think of the OS in a broader definition than at the point, because it’s just a small task handler. It’s a point piece. It’s quite frankly -- it…

Your next question comes from Ittai Kidron from Oppenheimer.

Thank you. I just made it in. Edel, I wanted to dig a little bit more about your international business. Can you give us a little bit more color on the quarter, on the units, how much was international and maybe a little bit more granule on a regional basis? And when you give your guidance, should we expect international to start outpacing the U.S., just given how penetrated you are in the U.S. over the next two, three quarters? Is that going to be a much more stronger contributor on the sequential basis than it’s been up until now?

Sure, Ittai. I mean, we don’t break out units or subs, international versus non-international. They were a bigger contributor but North America, I mean, I don’t mean to imply that North America wasn’t really successful this quarter. It’s just that there was a little bit more of a mix shift towards international and that is a bit more BIS oriented, so that was really why I brought it up. I mean, longer term, absolutely I think that what we are doing in international markets and all the work that we’ve been doing there is really paying off and I expect it to grow as part of -- you know, as a percentage of the mix as we go forward. But I don’t think it’s going to be some big, dramatic shift that you are going to see next quarter. I think again, it does kind of move around, depending on what launches and programs are going on at a particular quarter, so I think you kind of have to move away just from the quarterly trend and kind of look at it over a bit of a longer period of time. But would we expect it to grow? Yes.

Okay, very good. Thanks.

Operator, I think that’s all we have time for. In closing, I just would like to give everybody the dial-in number for the replay, as well as for the webcast. There’s a post-use service available at 416-640-1917, passcode 21289979#, or you can go to our website, www.rim.com/investorsolutions and listen to a replay of the webcast. Thank you.

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