Brian Bidulka - Chief Financial Officer Edel Ebbs - Vice President Investor Relations James L. Balsillie - Co-Chairman of The Board, Co-Chief Executive officer and Member of Strategic Planning Committee Unknown Executive - Michael Lazaridis - Co-Founder, Co-Chairman, Co-Chief Executive Officer, President and Member of Strategic Planning Committee

T. Michael Walkley - Canaccord Genuity, Research Division Simona Jankowski - Goldman Sachs Group Inc., Research Division Peter Misek - Jefferies & Company, Inc., Research Division Ehud Gelblum - Morgan Stanley, Research Division Tim Long - BMO Capital Markets Canada Tavis C. McCourt - Morgan Keegan & Company, Inc., Research Division Gus Papageorgiou - Scotia Capital Inc., Research Division Jim Suva - Citigroup Inc, Research Division Mike Abramsky - RBC Capital Markets, LLC, Research Division Jeffrey T. Kvaal - Barclays Capital, Research Division

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

Thank you, Luke. Welcome to RIM's Fiscal 2012 Second Quarter Results Conference Call. With me on the call today are Jim Balsillie and Mike Lazaridis, Co-CEOs; Brian Bidulka, CFO; 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 second quarter results, and Edel will discuss our outlook for the third quarter of fiscal 2012. We will then open the call up for questions. This call is available to the general public via call-in number and via webcast in the Investor Relations section at rim.com. The webcast include supporting slides that can 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 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, channel inventory and seasonality for Q3 and beyond; our expectations regarding RIM's near- and long-term tax rates; our product development and marketing initiatives and timing, including our expectations relating to the BlackBerry PlayBook and the QNX operating system; our expectations regarding our cost optimization and share repurchase programs; 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 risk relating to our intellectual property rights; our ability to enhance our current products and develop new products and services; risks related to delays in new product introductions; risks related to RIM's ability to implement and to realize the anticipated benefits of its cost optimization program; risks relating to competition, including our ability to effectively compete in the tablet market; our ability to manage inventory and asset risks; our reliance on carrier partners, third-party manufacturers, third-party network developers and suppliers; risks relating to network disruptions and other business interruptions; our ability to manage our production processes; risks associated with our international operations; security risks and risks related to encryption technology; our ability to manage growth; difficulties in forecasting financial results, particularly over longer periods given the rapid technological changes, evolving industry standards, intense competition and short product life cycles that characterize our industry; risks associated with the share repurchase program; 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. James L. Balsillie: Thanks, Paul. RIM shipped approximately 10.6 million smartphones in the second quarter, and the BlackBerry subscriber base is now over 70 million. RIM was approximately -- revenue was approximately $4.2 billion, and service revenues surpassed $1 billion for the first time in RIM's history, reflecting the over 40% growth in our subscriber base over the past year. The lower-than-expected unit shipments in Q2 reflected lower shipments of in-life products as customers work through inventory and awaited the launch of new BlackBerry 7 smartphones. Sell-through of BlackBerry smartphones in Q2 was the second highest ever at 13.7 million. Shipments of the BlackBerry 7 smartphones in the quarter were near the high end of our expectations but we're shipping for only 3 weeks and across just a portion of our carrier and partner network in Q2. BlackBerry 7 smartphones launched on schedule and have been enthusiastically received by our partners and customers for their blend of technical performance and industrial design. Mike will give further details on some of the launches later in the call. Demand for BlackBerry smartphones was strong across all regions. BlackBerry 7 launches occurred over the past few weeks in most regions around the world, although rollouts in Latin American and parts of Asia will predominantly start this quarter. In North America, BlackBerry 7 smartphones are having an excellent reception and have driven a meaningful increase in sell-through in the region during the last few weeks of the quarter and so far in September. In the last week of Q2, BlackBerry 7 smartphones accounted for approximately 35% of our overall sell-through in North America. Outside of North America, sell-through increased almost 50% in the first 2 weeks of Q3, driven by the launch of the new Bold 9900. With new BB7 smartphones that are already available in North American channels and with more to come this quarter, we believe we are well positioned to take advantage of the upcoming holiday season. All of our major U.S. carriers, AT&T, Sprint, T-Mobile and Verizon, have already or will be launching national marketing and promotional campaigns that will include TV, high-profile in-store displays, direct mail and targeted youth and college programs. Our major retail partners will also have dedicated merchandising space and targeted promotions over the course of the quarter to drive even greater awareness and sell-through in Q3. In Europe and the Middle East, BlackBerry Bold 9900 launched in many markets where we had strong promotional support and aggressive pricing from our carrier partners. For example, in the U.K., Vodafone's retail launch was supported by a full hero campaign and an aggressive $0 pricing plan on the Bold 9900. These promotions drove strong sell-through in the region, and we expect this to continue into Q3 as more hero campaigns supported by above-the-line campaigns including television, in-store displays and price promotions are launched throughout the region and our new brand campaign centered around BlackBerry 7 smartphones is launched in many of these countries. BlackBerry 7 devices have just started to roll out in Latin America, with 1 carrier already launched and dozens more expected to launch over the next quarter. BlackBerry continues to hold the top market share in the region, and our carrier partners are excited about the prospect of these new devices driving strong sales and have planned integrated marketing campaigns to support the launch. Additionally, we continue to strengthen our commitment in the region by announcing local manufacturing capabilities in Argentina, making it the third country we have local BlackBerry production capabilities. Asia continues to be a strong and growing market for BlackBerry smartphones, and the BlackBerry PlayBook was also launched in the region during Q2. Key carriers and retail partners in the region are supporting PlayBook with advertising support, prominent in-store displays and attractive bundle offers with BlackBerry smartphones and accessories. The new suite of BlackBerry 7 powered smartphones has been received with much anticipation and preorder, and early sales activities indicate the first BlackBerry 7 smartphone launched in the region, the BlackBerry Bold 9900, is a hit with customers. In China, we announced the first TD-SCDMA BlackBerry smartphone with China Mobile last week, and we continue to work with China Mobile to address local market needs to broaden the reach of BlackBerry smartphones in the region. In summary, early results from the BlackBerry 7 launch are strong, and we are rolling these devices out to all of our network, our full network of global partners, including broadening our launches in our strongest global regions. We anticipate acceleration of the uptake of BlackBerry devices for the remainder of the fiscal year and into 2012 to reflect in our guidance for the sequential unit shipment increase of 27% to 37% in Q3. We expect that this growth in units, combined with the benefits from our recent cost optimization program, will show steady improvement in our earnings per share in Q3 and Q4. PlayBook shipments were 200,000 in the quarter, which was lower than we had anticipated. We are planning to launch a major software upgrade for PlayBook, which will deliver some highly anticipated new capabilities and applications, which we expect to reinvigorate sales. We also have a number of upcoming programs in place to drive sell-through of PlayBook in both enterprise and consumer channels as we head into the fall and holiday buying season. Mike will provide more details on these shortly. During Q2, RIM was part of a consortium of companies that successfully bid for the Nortel patent portfolio. This resulted in a strategic investment of $780 million in the quarter, which is expected to significantly strengthen the company's technology platform as we prepare to deliver next-generation platforms and smartphone technologies. Despite this large cash outflow in the quarter, RIM's balance sheet remained strong with a cash position of approximately $1.4 billion. In addition to the Nortel patent portfolio investment, our cash balance sheet reflects cash flows related to the cost, realignment and working capital requirements, which Brian will discuss in greater detail. Given the cash commitment to our participation in the purchase of Nortel patent portfolio this quarter, we did not initiate any share repurchases. The board-approved share purchase program remains in place and shall be commenced at our discretion. GAAP diluted earnings per share in the second quarter were $0.63. Excluding the after-tax impact of our cost optimization charge, adjusted net earnings per share were $0.80 diluted within our EPS guidance range. The cost savings associated with the cost optimization program have been incorporated into our annual outlook. Given the lower-than-expected earnings in the second quarter, we expect full year adjusted diluted earnings per share, excluding changes related to the cost optimization program, to come in towards the low end of our guidance range of $5.25 to $6. The BlackBerry ecosystem continued to evolve in Q2. Following the successful launch of BBM 6, with the ability for BBM connected applications, we announced BlackBerry Music, which is built using the BBM connected APIs. BBM Music is a social music sharing platform, which enable social and viral music discovery by allowing users to build an evolving community-based music library from leading music companies, Universal Music Group, Sony Music Entertainment, Warner Music Group and EMI, to share amongst their BBM Music friends. At launch, there will be more than 10 million songs available in the music catalog, and the more friends you have on your contact list, the more music you can have access to. BBM Music has generated significant buzz among the community of beta users ahead of its fall launch plans. We have spoken in the past few quarters about the transition the company is going through as we evolve to our next-generation mobile platform. Mike and I wanted to give you some more insight into how we are working through this and how we view some of the milestones along the way. The successful launch of the BlackBerry 7 smartphones is a critical part of the transition plan. As I mentioned earlier, these launches are going extremely well. We have only started to see the results of this success reflected in the business. BlackBerry 7 has a lot of runway that we believe can carry us through the transition to QNX-based smartphones. I will hand the call over to Mike shortly to give more details on our progress towards delivering the next-generation QNX-based mobile platform. Another key component to navigating the transition is the cost optimization program we began implementing in July. This program allows us to reduce costs in some areas, while increasing investment in technologies, projects and new personnel that is better aligned with our future growth opportunities. While it is always a difficult decision to reduce headcount, our business and marketplace's dynamic requires our organization to make adjustments. We have completed the major portions of our workforce reductions and are putting in place retention programs throughout the organization. Driving cost efficiency and managing the organization's structure is a continuous process, but we feel we have made tremendous progress and are confident the teams we have in place can successfully meet the future needs of our BlackBerry community and execute on our transition plan. As you saw with the announcement of this program, we have realigned responsibilities among senior managers as well as made new hires to execute on our plans. We view these changes as healthy for a global technology leader and must constantly address the changes in both the competitive landscape and the rapid pace of technological change. While getting the company to this point has been choppy over the past several quarters, we believe the architectural foundation of RIM, based on the acceptance and success of BlackBerry 7 and the technical performance and openness of the QNX mobile platform, is the strongest it has ever been. We sincerely thank our 70 million subscribers around the world for their loyalty and passion for our product and look forward to enhancing their experience even more in the coming months and years. Let me now turn the call over to Mike.

Thanks, Jim. We're very pleased with the recent launch of our 7 new BlackBerry 7 smartphones. The combination of the BB7 operating system capabilities, the high-performance processor and the best hardware designs we've had to date has been well received by our partners around the world. In the first several weeks of the launch, 147 launches have occurred with approximately 90 carriers in 30 countries, and we've achieved over 600 certifications currently at 250 carriers. We're also excited to have already received 118 carrier certifications for our new BlackBerry 7-based Curve, the highest volume BlackBerry smartphone ever, which we expect to be launched by 165 carriers around the world in Q3. This is the largest and most successful global launch of BlackBerry smartphones in our history. On top of the powerful hardware enhancements, including upgraded processors, displays and memory, BlackBerry 7 devices offer faster web performance with industry-leading JavaScript performance, liquid graphics, the world's best mobile QWERTY keyboard on the BlackBerry Bold 9900 and NFC capabilities. The seamless integration between hardware, software and platform has not gone unnoticed, and BlackBerry 7 devices have been getting great reviews for their robust performance and exciting industrial design. In addition, we have secured more than 200 separate carrier promotions around the world for BlackBerry 7 smartphones, and we plan to build on the strong foundation of support. The NFC implementation on BlackBerry 7 is already showing itself to be a differentiator in the enterprise market. Just today, it was announced that the new NFC-enabled BlackBerry Bold and BlackBerry Curve will be the first smartphones with high-class functionality with digital keys and identification, secure access to buildings, offices and networks. This is the first in the development of mobile access and identity solutions using NFC technology on smartphones, and we're excited to be part of it. BlackBerry 7 smartphones also allow developers and users to take advantage of the recent enhancements to BBM, which now extends the real time BBM experience to a range of other socially connected apps, where a BBM user has the ability to interact with friends within the app itself. In fact, over 13 million downloads have occurred of BBM socially connected apps such as Poynt, foursquare, Square mobile and Jingu. BBM Music, which Jim mentioned earlier, is also an excellent example of the power of the BBM mobile social platform. In Q2, we launched App World 3.0, with enhanced merchandising and discovery capability, including a BlackBerry App World carrier channel, which is a carrier-branded area in BlackBerry App World where supported carrier partners can highlight select content items to make them more discoverable to end users. App World is now available in 129 markets, and it's growing library of more than 40,000 apps now averages a daily download of 4 million apps. We continue to work with carrier partners to support carrier building, which is now available in 10 countries with 15 carriers. With the end-to-end platform RIM is developing, combined with a growing subscriber base of over 70 million BlackBerry users, we continue to be an attractive destination for many technology innovators. As Jim referenced, we shipped approximately 200,000 BlackBerry PlayBooks in Q2, well below where we would like it to be. As you know, PlayBook has established itself as a high-performance tablet, which we believe will ultimately be successful in a market that is in its infancy but rapidly growing. The PlayBook security reputation is unmatched in the tablet industry, which was confirmed when it was the first tablet certified for deployment within U.S. federal government agencies and the Australian Federal Government. We're also pleased that earlier this week, the Citrix receiver for the BlackBerry PlayBook tablet became available for beta testing. The Citrix receiver leverages the multi-tasking capabilities of PlayBook, so users will be able to work like they do on a desktop or laptop, with multiple applications running simultaneously but do so remotely from the BlackBerry PlayBook tablet. We recognize that the current availability of content and applications for PlayBook has limited the near-term uptake of the device in the market, and we are actively working with key partners to deliver the most desired applications and content to our targeted market segments. Rather than easing these enhancements out little by little into the market, we are planning to bundle a number of significant features and enhancements into a new major software release for PlayBook that will be demonstrated at DevCon in October and released thereafter. The ability to push out upgrades over the year to PlayBook is a significant advantage, and both existing and new PlayBook users will be able to benefit from this new software release when it is available. Some of the key enhancements that we expect to be delivered in the PlayBook 2.0 release are: built-in native email, calendar and contacts; robust enterprise features, including BlackBerry Balance to allow management of personal liable devices; the previously announced Android app player; enhanced web browsing; the availability of new consumer apps and social -- the availability of new consumer apps and multimedia and video content, including BlackBerry video store, which will have 10,000 movies and TV shows available on demand to buy or rent as well as new movie releases on the same day as DVD availability; and of course, with the built-in HDMI output, the ability to enjoy videos on your TV without the need to purchase additional system components, as well as further improvements to BlackBerry Bridge. We continue to work with gaming partners like Unity, Ideaworks Labs and Electronic Arts to bring new and exciting games to the QNX platform. Ideaworks Labs' Marmalade is now available to developers in an open beta, and the company is working to support[ph] some of their existing games over the next few months with some, like, Battle Balls already released. We also have teams targeting the delivery of major media, gaming and productivity apps that customers are demanding, and we will provide more details next month at DevCon. The upcoming PlayBook 2.0 launch is a prime example of the power and flexibility of the QNX mobile operating system, which allows PlayBook users to experience major upgrades and features, content and functionality for free through a simple, over-the-air upgrade that is pushed out to the device. Additionally, we have promotional plans in place for the fall intended to drive both enterprise and consumer adoption of PlayBook, including special incentive programs for enterprise, a loyalty program for existing BlackBerry customers and rebates in consumer channels. We are confident that these activities will generate an increase in demand and sell-through in Q3 and into the holiday season. Development efforts on the first QNX-based smartphone products are going extremely well, and we plan to ensure that when we launch, the product will have the features, industrial design and content and app ecosystem it needs to deliver a dynamic and industry-leading customer experience. The development platform for QNX phones will be presented in more detail at DevCon in October, and prototype phones, featuring the QNX operating system and development platform will be available in the not too distant future. We have learned the importance of ensuring an established vibrant ecosystem is available prior to commercial launch, and our QNX smartphones application environment development and final industrial design will be released into the market based on this experience. Success of the recent BlackBerry 7 launches is a prime example of how the decision to make the right technology choices and to meticulously focus on product readiness were the right choices. If we had rushed out BlackBerry 7, we would not be benefiting from the rapid take-up, positive reviews and strong sell-through that we expect will drive our results over the next few quarters. We understand that the past few quarters have been challenging, and we are confident that we are on track to return to growth in Q3 and beyond. We are thrilled with our BlackBerry 7 launch, but are equally excited as we move towards delivering the QNX mobile platform, which gives us and our partners the opportunity to reimagine the power of BlackBerry and to deliver customers a unique and industry-leading mobile technology experience. I'll now turn the call over to Brian to discuss the financials.

Thank you, Mike. Revenue for the second quarter of fiscal 2012 was $4.2 billion, primarily reflecting the lower number of BlackBerry handheld devices and PlayBook shipped. RIM shipped 10.6 million smartphones and 200,000 PlayBook tablets during the second quarter. Shipments of new BB7 products in the quarter were near the high end of our expectations. Overall smartphone shipments were impacted by lower shipments due to high channel inventory of older in-life products. Channel inventory levels of the new BB7 products are relatively low and inventory of the older products was drawn down in the quarter. Service revenue increase by $232 million year-over-year, surpassing $1 billion for the first time ever, reflecting the strong growth in RIM's BlackBerry subscriber base. Software revenue increased by $7 million year-over-year to $78 million. On a geographic basis, sales outside the United States, United Kingdom and Canada represented approximately 56% of the total consolidated revenue. Some of the larger markets in the quarter were South Africa, Indonesia, Western Europe, Middle East and Latin America. U.S. sales were 27% of total consolidated revenue. Sales in the U.K. represented approximately 10%, and Canada represented the remainder. Hardware revenue was 73% of sales, with services, software and other representing 27%. Estimated sell-through in the quarter was approximately $13.7 million, including phone-only sales. This was the second highest level of sell-through in RIM's history. We expect this to increase significantly as BlackBerry 7 products continue their global rollout, and the early data from the first few weeks of launch supports this, as Jim mentioned. ARPU was slightly lower than the last quarter primarily due to an increasing percentage of tiered BIS plans and prepaid customers in the mix. Gross margin was 39% in the quarter, reflecting higher service revenue in the consolidated mix as well as lower PlayBook sales, offset in part by a higher percentage of lower ASP products than expected and the mix of in-life product shift. Operating expenses were $1.2 billion in the second quarter, which includes $105 million of charges associated with the cost optimization program. The company's income tax expense was $85 million, resulting in an effective tax rate of 21%, slightly lower than the first quarter due to the resolution of the tax issue. We expect the tax rate for Q3 and Q4 to be approximately 24%. Net income for the second quarter was $329 million or $0.63 per fully diluted share. Net income includes $118 million in charges associated with the cost optimization program. Excluding the charge, adjusted net income was $419 million or $0.80 per fully diluted share. We expect some incremental charges associated with the cost optimization program in the third quarter as well. The press release from this afternoon contains a reconciliation of our GAAP net income and diluted EPS to adjusted net income and adjusted diluted EPS. Moving to cash flow. The company made significant investments in intellectual property this quarter with a $780 million purchase. The Nortel assets is part of the consortium of companies as well as having higher working capital requirements due to higher levels of inventory and DSOs. CapEx in the quarter was $285 million. Inventory increased by just over $400 million to $1.4 billion. This balance reflects additional raw materials associated with the new product launches as well as PlayBook inventory. As Jim and Mike noted, current PlayBook sell-through is lower than we have forecasted. Additionally, RIM made a strategic investment in certain high-value components related to PlayBook that were in tight supply at the time of the commitment. This has resulted in normal -- higher than normal levels of inventory on the balance sheet. In addition to the inventory on RIM's balance sheet, there is inventory in the channel that we'll work through with our partners to sell-through over the coming months. As we discussed earlier, we are implementing a number of programs to drive sell-through beginning this quarter. RIM continues to maintain a strong balance sheet with cash, cash equivalents, short- and long-term investments of approximately $1.4 billion at the end of the quarter. RIM also recently entered into an agreement for a $500 million credit facility, which will eventually replace the existing $100 million credit facility. We expect the cash balance to be slightly lower again in the third quarter primarily due to working capital requirements associated with the PlayBook inventory and component requirements for the rollout of the new BlackBerry 7 smartphones. Now I'll turn the call over to Edel to provide more detail on our outlook for Q3.

Thanks, Brian. Before I discuss the outlook for Q3, 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 disclosed in our public filings. We expect total revenue for Q3 to be in the range of $5.3 billion to $5.6 billion, which includes BlackBerry smartphone shipments of between 13.5 million and 14.5 million units, which is a sequential increase of between 27% and 37%. The broad acceptance of BlackBerry 7 products across our channels and a higher-than-normal degree of order coverage for this point in the quarter relative to Q2 gives us confidence in our Q3 unit shipment forecast. We expect gross margins to be approximately 37%. This decrease versus Q2 reflects the lower percentage of service revenue in the mix and the anticipated implementation of a number of programs designed to increase PlayBook sell-through. Total operating expenses are expected to be flat to slightly higher in Q3 as benefits from the cost optimization program are offset by increases in R&D costs of approximately 13% and launch in holiday sales activities. We expect total SG&A to decrease by approximately 5%, and we expect depreciation and amortization to be approximately $150 million. We expect CapEx to be approximately $200 million in Q3. We expect Q3 adjusted diluted EPS, excluding charges related to the cost optimization program, to be in the range of $1.20 to $1.40 per share diluted. Adjusted diluted earnings per share for the full year of fiscal '12, excluding the impact of charges related to the cost optimization program, is expected to be towards the low end of our previously guided range of $5.25 to $6. This reflects increased costs associated with programs to drive PlayBook sell-through as well as the lower-than-expected revenue in the second quarter. This concludes our formal remarks, and I'd like to ask the operator to open up the call for questions. I'd also like to ask you to limit your questions to one, please.

[Operator Instructions] Your first question today comes from the line of Mike Abramsky of RBC Capital Markets. Mike Abramsky - RBC Capital Markets, LLC, Research Division: I'm just trying to understand, you appear quite confident about BlackBerry 7 giving you a window to QNX, if I properly paraphrased your comments. I'm just wondering why you feel that confidence given that sell-through is obviously coming below than what you previously expected? And I know that this was transitional, but you talked about last quarter also that there were product transitions leading to your lower guidance. I'm just wondering if in the big picture there is a risk that BlackBerry 7 share losses in North America -- or your overall share losses in North America, sorry, may not be helped as much by BlackBerry 7. We might see some additional losses and perhaps even some more impact from Android before QNX starts to kick in. James L. Balsillie: Well, Mike, this is Jim, and we've already seen a meaningful increase in sell-through and decreased churn in North American carriers who have launched BB7 handsets. And we have plans to more than double the number of models available in the U.S. and increase the number of channels selling the products, which should further improve our position in the U.S. So this gives us a lot of confidence, coupled with the reviews and the competitive performance that this product has got a tremendous amount of runway that's going to service extremely well.

This is Mike. In the last week of Q2, BlackBerry 7 accounted for approximately 35% of the overall sell-through in North America, and Mike, outside North America, sell-through increased approximately 50% in the first 2 weeks. And I know this is early, but these are really good results for a completely new product launch. Mike Abramsky - RBC Capital Markets, LLC, Research Division: Is there a risk that the sustainability of that may taper off following the early upgrade cycle from what are obviously your most loyal fans? James L. Balsillie: No. I think the BlackBerry Bold 9900 and 9930, I mean, is just a -- one is seen as a thing of beauty to behold. I mean, it's getting great reviews around the world, and people are really enjoying the new BlackBerry 7 experience.

And Mike, it's also not -- I mean, we've seen big increases in sell-through, but we've also seen increase in mix. So it's not just replacement customers that are buying these new products. It's being driven by both.

Your next question comes from the line of Jim Suva. Jim Suva - Citigroup Inc, Research Division: With the gross margins being lower, can you talk about is this a new one time item or a new level that we're looking at? You'd mentioned that it's being materially impacted by the PlayBook. Can you help us understand the disappointing gross margin outlook?

It's Brian here. Our second quarter gross margin was really reflected a 24% mix of the service revenues. So it was a strong mix in the overall gross margin on the service side. So I think what we're seeing is just the impact of handheld being a larger portion of mix in our Q3 forecast than we had in Q2. Jim Suva - Citigroup Inc, Research Division: I have a quick follow-up on QNX timing, I believe Jim used to say early calendar next year. Is that still on track? Or is there any link to the Android player later not being on PlayBook about that potentially impacting the rollout timing of QNX?

Well, we've got a lot of planned announcements at DevCon in October, and we've got -- we'll be announcing our new development platform for QNX and our QNX-based phones. We'll be launching the development phones, so that people can start experiencing the QNX phones and the applications. So we've got a lot of things planned. At this point, we want to be careful not to give up too many of our secrets and specifications of the product and delivery dates. But we're very excited, and the fact that we've already got the development phones operating right now and we're testing them is a great sign. James L. Balsillie: And the idea of an Android player being a factor in launching a QNX phone is not a factor at all.

Your next question comes from the line of Jeff Kvaal of Barclays Capital. Jeffrey T. Kvaal - Barclays Capital, Research Division: I was wondering if we could follow up on the gross margin question a little bit. Obviously, gross margins have come in a decent amount over the past couple of quarters. To what extent is 37% of the way that we should think about that going forward? To what extent the PlayBook promotion is one-time and therefore, what should we assume though what's happening in the underlying hardware gross margins?

This is Edel. Yes, I mean, obviously, in the older products, the gross margins as they tail off in their life cycle are a lot lower. The BlackBerry 7 new handsets have a much better gross margin profile. In terms of the impact on gross margin from the PlayBook activity that we're going to be undertaking over the next few months, it's going to be more than one quarter impact. So you have all those dynamics playing in the gross margin. I wouldn't -- I mean, the BlackBerry 7 handsets do have good margins, so I wouldn't try to read too much into that. Jeffrey T. Kvaal - Barclays Capital, Research Division: Okay. So theoretically then, if the mix of BB7 is picking up, that would be helpful due to the margin structure in, let's say, fiscal fourth quarter into 2012?

That's correct.

Your next question comes from the line of Tavis McCourt of Morgan Keegan. Tavis C. McCourt - Morgan Keegan & Company, Inc., Research Division: Mike, I wanted to follow up, you mentioned a couple of things we should expect on the next version of the PlayBook operating system, and you said native email. Does that specifically mean BES integration? And would you expect BES integration as one of those key applications that you would want to get right before launching a QNX phone?

That's a great question. I mean, the great thing is that we can upgrade the PlayBook, and our customers are all benefiting from very simple, effortless wireless upgrade that they've become accustomed to. And certainly, the PlayBook 2.0 release is going to be something that they're looking forward to, and I expect them to be very, very happy with. The built-in native email calendar and contacts of course will work with BES, but it will also work with email services. So it's something that some customers have been waiting for. Certainly, the BlackBerry Bridge solved the immediate security and deployment issues that some of the enterprise customers and some of our government customers were challenging us to solve, and it was a very successful implementation that solved those particular security and deployment challenges. But I think our customers have been waiting for the native email, calendar and contacts, and certainly, that will work with BES and it will also work with the basic email service. Tavis C. McCourt - Morgan Keegan & Company, Inc., Research Division: Okay. And can you talk about -- I guess, this might be for Edel. The 13% sequential growth in R&D expectation for Q3, normally we see that was kind of prior to big launches. But what is driving that specifically sequentially?

I mean, there's a lot of different activities going on in R&D, some of it is development activities. We also mentioned certain programs that are going on in terms of key talent, traction and retention.

Your next question comes from the line of Jason North of Jefferies. Peter Misek - Jefferies & Company, Inc., Research Division: It's Peter Misek. Just a couple of quick questions on free cash flow if I may. So as we look out for the rest of the year in terms of free cash flow target, at what point and what level should we think about cash on hand and then your comfort level with doing buyback? Should we think that the current level is what -- is sort of the baseline, anything above this we should consider for a buyback? Or do you think there needs to be a bigger cushion potentially for more components or working capital?

Peter, it's Edel. I mean, I think we always, when we're looking at uses of cash, I mean, we take into account all the different opportunities open to us. And as you saw last quarter, there was an opportunity to participate in the Nortel consortium. That took some other alternatives off the table. We undertake that same process whenever there are opportunities available and that would apply to any future potential buyback. Peter Misek - Jefferies & Company, Inc., Research Division: Just one quick follow up on those patent things. It appears that your patents, particularly in security, seem to be quite strong. I guess, I'm surprised we haven't heard of headline or read that RIM was potentially seeking royalties from other handset makers that I think would need your technology to be going into the enterprise or be going into government. I'm curious as to your thought process there. James L. Balsillie: Patents is a pretty complex, multifaceted game. I think we've done a pretty commendable job of fortifying ourselves and not someone who's attractive to be pursued by another practitioner. So I think that's been a real strength of ours, and I think we've done a very good job of managing the complex IP stuff that's at play. With all the activities of people spinning them off and trying to create a next-generation set of activities in IP, this is something that obviously one has to strategically look at. But we have nothing to comment on this time. But I think the patents we've acquired in the past and the royalty structure that we've managed and the protection for the company as well as all the, literally, thousands and thousands of patents we filed in our innovation the last few years has fortified the company extremely well in this patent game.

Your next question comes from the line of Simona Jankowski of Goldman Sachs. Simona Jankowski - Goldman Sachs Group Inc., Research Division: Could you just help us think about the transition from BlackBerry 7 to QNX? And even if you're unable to give any specifics, but just conceptually, if we think about it a year from now, would you expect the majority of your unit volume to be on QNX or BlackBerry 7?

Well, one of the things that you have to be very careful with transitions, so as we've talked about before, it takes a lot of work to do them properly. And one of the things that you're going to find is nothing happens right away. BlackBerry 7 is seen as a hugely successful upgrade to the BlackBerry family. BlackBerry 7 with the BBM platform is becoming very, very popular, and there is a transition opportunity that we've discussed and we'll be showing more at DevCon, where we're able to use the WebWorks and HTML5 framework, which is identical on both the BlackBerry 7 and QNX-based next-generation. I suspect that we're going to see strong growth in both, and they have different market segments and different appeal around the world. But I would say that we have 2 very strong platforms, and they're targeted at 2 different markets, and I expect that -- I expect both of them to have a very strong and long term coexistence. Simona Jankowski - Goldman Sachs Group Inc., Research Division: Okay. So it sounds like even if we're looking 12 months out, BlackBerry 7 would likely still be the majority of your volume, and QNX will be more the overlay on top of that more targeted at the high end?

That's a good summary, yes.

Your next question comes from the line of Mike Walkley of Canaccord Genuity. T. Michael Walkley - Canaccord Genuity, Research Division: Just want to follow up a little bit on the full year guidance. Clearly, you are not going to talk about new product launches, but it appears on my math that you return to and be a record quarter or return to year-over-year growth in your February quarter. Can you help us just reconcile maybe some of the assumptions there given you've talked about a multi-quarter promotional activity on the PlayBook? Is it just more BlackBerry 7 ramp into the out quarter, or is it new products? Or maybe you can just help us reconcile that big recovery in the last quarter of the fiscal year?

It's definitely BlackBerry 7. I mean, it really has only been in the market a few weeks, so it's really just starting to ramp. I mean, Mike gave some really great stats there in terms of certifications that are underway or being granted, but yet haven't rolled out yet. That activity is going to continue into Q3 and Q4, and there's other BlackBerry 7 products that we haven't announced yet as well that will be part of driving some of that growth into the end of the fiscal year. James L. Balsillie: And the gross margin mix as well will be improved with BB7 products as Edel mentioned. T. Michael Walkley - Canaccord Genuity, Research Division: Okay. Great. And do you feel like you have good carrier promotions into the holiday selling season to support the continued ramp? James L. Balsillie: Absolutely, yes. The carriers are behind it big time.

Your next question comes from the line of Ehud Gelblum of Morgan Stanley. Ehud Gelblum - Morgan Stanley, Research Division: First, just to confirm what you were talking about before, Edel, and I think maybe Jim on the gross margins, that it sounds as though the BlackBerry-only gross margins, if we were not to look at the dilution from PlayBook, sounds like they may actually be flat to up. I just want to confirm that that's true, and that the total gross margins declined and the device business is coming from the PlayBook discounts and that we're actually seeing an uptick on the BlackBerry. And then if you look at the -- Brian, you look at the geographic split you gave, which I thought that was very interesting. For the first time, and I think in 6 quarters, the U.S. did not go down as a percent of total revenue. It was the same 27% it was last quarter. And I understand that you had very strong last 2 weeks of the quarter with the BlackBerry 7 launches. But if you can give us a hint as to what happened on the subscriber side to help that out? Did subscribers decline in the U.S., or did they stay flat? Or did they actually grow in line with kind of what we're looking at in the total revenue? If you could give us a sense of that, it would be terrific.

Ehud, your analysis on the gross margin is accurate.

Yes, that's correct.

I mean, as you know, we don't give the net numbers anymore. We've seen some really good growth in the base. We did give some stats on the increases and improvements in North America, and what we saw sell-through increase 50% in the first couple of weeks of the third quarter. In order to support that kind of growth and sell-through, you obviously have to ship a reasonable amount to support that. So the BlackBerry 7 launch, I would say it's been going really well and helping us out a lot in North America. Ehud Gelblum - Morgan Stanley, Research Division: Okay. Can you give us a sense as to what the subscriber breakdown looks like and how U.S. subscribers did?

We don't disclose that anymore. Ehud Gelblum - Morgan Stanley, Research Division: Okay. I'll try one last separate thing. Mike, can you give us a sense as to on the patent buy that you had, the $780 million? Can you explain to us what you got? Are you now, all 6 of you, jointly owning those patents? It's something I haven't quite been able to understand. Or did you each buy a particular subset of those patents? And if you're jointly buying, purchasing them, what's the structure of that? And how are those patents -- how can those patents be used? Does it need the consensus of all 6 parties? Or if you can just give us a little explanation behind that? James L. Balsillie: There's a structure where all the participants got license to the patent, so they're protected from them. And there are a lot of patents, and they're quite broad. And then there was an element of drafting for particular ownership and certain ones are in approval. So it gives unique opportunities to both protect and monetize, as well as collective opportunities to monetize as well as assurance that the group will not be asserted by those patents. So those are the 3 aspects of benefit we got from them.

And we can't really talk a whole lot more about it right now.

Your next question comes from the line of Gus Papageorgiour of Scotia Capital. Gus Papageorgiou - Scotia Capital Inc., Research Division: Brian, a question for you. So in the last quarter, it looks like you sold through about 100,000 more than you shipped into the channel. And this quarter, it looks like you sold through about 2.9 million more than you shipped into the channel. So you brought the channel by about 3 million units over the last 2 quarters. How much more is there to go before the channel inventory is at a level where you start to see that once again? James L. Balsillie: That's a good question. I think it's an indication that there was a tremendous interest in the new products. And so I mean, that's -- the good news is we shipped these products when we said. I think the good news is demand was as high for everything. We could ship and much more. I think the reality was that in beating up to this anticipation, they cleaned out channels. So this is a remarkable transition we've completed, and it's pretty hard to believe there's a lot more to go in terms of the capacity to squeeze that down. Gus Papageorgiou - Scotia Capital Inc., Research Division: So do you think maybe next quarter or maybe Q4 that you'll be feeding the channel again? Or how much longer before that goes back to kind of your normal levels where you're starting to ship product into the channel?

I mean, Gus, it's tough to say exactly. We kind of have to look at it in terms of in-life product and new product. I mean, obviously, the channels are pretty lean in terms of the new product. There's lots of opportunity to ship there, which is supporting the guidance that we gave. In terms of in-life product, I mean, there's still a lot of demand for those products. As Jim said, we had the second-largest quarter ever in terms of sell-through last quarter, and that was with the majority of it being the in-life stuff. So there's still a lot of demand for those products, so you expect that to continue to draw down. It's tough to comment on exactly what a normal level is because it's kind of related to the life cycle.

Your next question comes from the line of Tim Long of BMO Capital Markets. Tim Long - BMO Capital Markets Canada: If you could just -- you've had a pretty good run at the low end of the entry level of the smartphone market with 8520 and 9300. Could you talk a little bit about what's going on there from a market share perspective? Are you seeing more Android? And when will we see a BlackBerry 7 phone to address more of the entry level? And relating it back to channel inventory, do you think a lot of that channel burn was also in this low end of the segment of the market? Or do you think it was more Bold type of products?

We've just launched -- we received 118 carrier certifications of the new BlackBerry 7-based Curve, which is our entry-level category, and it's also our highest volume BlackBerry smartphone ever, the Curve line. We're expecting to have it launched now by 165 carriers around the world next quarter in Q3. So we're pretty excited about BlackBerry 7-based entry-level devices and the new Curve. So we're -- I would think that the BlackBerry 7 launch has been very successful. It was our largest and most ambitious launch, global launch in our history. I think you're getting a sense of the scale at which we're operating as a global company.

In terms of the channel inventory, I mean, it's really across-the-board, although Brian did mention that there was some mix impact on gross margin in in-life products in the quarter due to the lower ASP products, which leads more into that entry-level category. Tim Long - BMO Capital Markets Canada: And Mike, just following up, is that -- I mean, is the Curve BlackBerry 7 going to be low end enough? Are you going to need to still support 6.0 to get even lower if price points move down because of Android? Or can you get down into the $100 price points with 7?

One of the things, I have a saying, "there's no step function in business." I mean, these -- the markets -- it's such a large scale when you start to look at the global telecom market and all the carriers, the 600 carriers around the world that we work with. These products are very successful. Their users love the BlackBerry around the world, and these products have a long life to them. And so again, I don't see anything as a step function. I see it as a blending, and I expect the BlackBerry 6 devices to continue to sell as we ramp up the BlackBerry 7.

Thanks, operator, and thanks to everyone for listening to the call. I'd like to remind everyone that there is a replay service available at (416) 640-1917, passcode 4466490 and the pound sign, where you could also listen and watch the webcast, which has been recorded and will be available to the Investor Events section of our website at rim.com/investors. Thank you.

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