December 15, 1998

Research In Motion Reports Sharp Q3 Revenue and Net Income Increases

Waterloo, Ontario - Research In Motion Limited (TSE:RIM) today reported record increases in both revenue and net income for the three months ended November 30, 1998 due primarily to large-scale shipments of its new Inter@ctive™ Pager 950 in the United States.

Net income for the third quarter of fiscal 1999 rose to $4.2 million (7 cents per share basic, 6 cents fully diluted) compared to $0.8 million (1 cent per share basic and fully diluted) in the corresponding quarter of fiscal 1998. Net income for the first nine months of fiscal 1999 was $5.2 million (8 cents basic, 7 cents fully diluted) versus a loss of $1.4 million (loss of 2 cents per share basic and fully diluted) for the comparable nine months a year ago.

Revenue for the most recently completed quarter increased 141% to $27.0 million compared to $11.2 million in the same three months of fiscal 1998 as the company began to fulfill orders in backlog for Inter@ctive Pagers. The Inter@ctive Pager 950 accounted for 85% of total product revenue in the quarter, while sales of radio modem products continued to grow and represented the balance of total product sales. Also included in revenue was $0.9 million in government funding. Revenue for the first nine months of fiscal 1999 of $46.6 million represented a 137% increase over the $19.7 million in revenue generated in the same period a year ago.

"The third quarter represented a breakthrough for RIM in a number of ways," said Mike Lazaridis, RIM President and Co-CEO. "As anticipated, we put the Inter@ctive Pager 950 into full production and achieved a high degree of efficiency, productivity and quality on behalf of our customers. Our production team has scaled effectively to meet this increased demand and our facilities have the capacity to ramp up quickly as future demand requires. As planned, we expect fourth quarter sales volumes to be consistent with the third quarter, allowing us to achieve our revenue targets for fiscal 1999."

"This quarter we achieved strong marketplace confirmation that both our new pager and our OEM modems are products that have strong long-term potential," said Jim Balsillie, RIM Chairman and Co-CEO. "The broad range of industries currently developing applications for our products - such as financial services, field service, health care, public safety, real estate, retail, security, telecommunications, transportation, utilities and the military - suggests RIM is fulfilling a fundamental need for wireless capability.

"Through our special software development program, we are stimulating these applications. Our goal is to continue to fully manage this rapid growth by recruiting the best knowledge workers in the industry and maintaining our focus on both expansion and profitability.

Gross profit in the third quarter of fiscal 1999 was $11.7 million or 43% of revenue versus $3.5 million (31% of revenue) in the corresponding period of fiscal 1998 and $4.3 million (43% of revenue) in the second quarter this fiscal year. Enhanced labour and production resource utilization and reduced material costs related to higher volume purchases of raw materials are the primary reasons for the year-over-year improvement. Gross profit for the first nine months of 1999 was $20.7 million (44% of revenue) compared to $6.8 million (34.6% of revenue) in the same period last fiscal year.

Enhanced sales channel development and heightened recruitment activities resulted in an increase in selling, general and administrative expenses. These expenses totaled $3.2 million in the third quarter of fiscal 1999, $1.2 million in the second quarter of this fiscal year and $1.3 million in the corresponding period of fiscal 1998.

Research and development investments totalled $2.9 million (10.7% of revenue) versus $1.2 million in the corresponding quarter of fiscal 1998 and $3.2 million (33% of revenue) in the second quarter of fiscal 1999.

Among recent highlights:

• BellSouth Wireless Data, a prime RIM customer, launched a highly effective national advertising and co-operative marketing campaign with retail partners, featuring the Inter@ctive Pager 950. BellSouth also announced a number of new wireless solutions for the transportation industry that use the RIM Inter@ctive Pager for wireless dispatching, GPS tracking and email.
• Sybase, one of the world's largest software companies, has introduced RIM technology for its Sybase Financial Server, which enables wireless banking.
• In an investment industry first, Fidelity Investment Management's new InstantBroker service now offers clients the opportunity to actually trade stocks in addition to receiving real-time stock quotes and news using RIM's Inter@ctive Pager 950.
• GoAmerica has bundled the RIM PC Card with JP Systems' NetCradle to create the world's first multi-network cradle for PalmPilot and PalmIII organizers. The new Web@Hand solution will be available in early 1999.
• BellCore's Airboss has also introduced RIM's technology to enable field service workers to access information on their corporate network.
• OEM radio modem contracts were signed with Itronix Corporation, DataWave Systems and GMSI Inc. These contracts will result in the RIM modem being embedded into a line of ruggedized notebook computers, fleet management systems and wireless vending machines that distribute pre-paid long distance cards.

The Board of Directors of Research In Motion is pleased to announce the appointment of E. Kendall Cork as a Director of the company, effective immediately. Mr. Cork is Managing Director of Sentinel Associates Ltd., a leading business and financial consulting firm and Vice-Chairman of E-L Financial Corporation Ltd. He is also a Director of several corporations including Dominion of Canada General Insurance, Empire Life, The Bank of Nova Scotia, McCain Foods, United Corporations, Strongco, InternetSecure and the University of Toronto Press. A graduate of the University of Toronto, Mr. Cork brings to RIM more than 35 years of corporate experience. Mr. Cork will also serve on the Company's audit committee. With this appointment, RIM's Board of Directors is now comprised of six members.

About Research In Motion

Research In Motion Limited (TSE:RIM) is a world leader in designing, manufacturing and marketing wireless consumer and business-to-business electronic access technology for the rapidly emerging mobile personal communications market. The company's current product portfolio includes revolutionary two-way pagers, wireless personal computer card adapters and embedded radio-modems. Based in Waterloo, Ontario and listed on The Toronto Stock Exchange, Research In Motion is a knowledge-based company with proven, leading technologies. Its customers include a diverse range of major multinational companies including wireless network suppliers, original equipment manufacturers and value-added resellers. Email: info@rim.net. Web site: www.rim.net.

Research In Motion, RIM, the RIM logo, Inter@ctive and Inter@ctive Pager are trademarks of Research In Motion Limited. Research In Motion and RIM are registered, U.S. Patent and Trademark Office. All other brands, products and company names mentioned herein may be trademarks or registered trademarks of their respective holders.

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