Partially offsetting the hardware troubles, the company saw a surge in customers upgrading to its recently released update for its BlackBerry Enterprise Server, Kavelman said. "We had a perfect storm in software this quarter," he said. The shift to software did have a positive benefit: the higher margin sales helped the company's gross margin jump to 56.8% of revenue, up from 52.3% in the third quarter and 49.1% in the year-ago period. The company expects its gross margin to settle in the mid-50s, percentagewise, "going forward," Kavelman said. RIM added 470,000 subscribers in the quarter to its BlackBerry service, up from 387,000 in the third quarter, giving it a total of 2.51 million subscribers at year end. The company had just 1.07 million subscribers at the end of its previous fiscal year.