Revenues for the full year of 2008 grew to $72.3 million from $68 million in 2007. Wireless service revenues grew by 23 percent, more than offsetting the decline in hardware revenues of 3.5 percent. The anticipated lower hardware sales were due to the completion of the analog to digital transition in the commercial and residential security market coupled with reduced demand for wireless modules from M2M customers adjusting to the macroeconomic slowdown and lack of liquidity. Fourth quarter and full year margins of 2008 were 39.8 percent and 35.1 percent respectively, compared to 35.1 percent and 34.4 percent for the same periods in 2007. The increase in wireless service revenues drove an overall margin improvement since service revenues have a significantly higher gross margin than the ones achieved through the sale of hardware. Excluding impairments, operating expenses were $7.7 million for the fourth quarter of 2008 and $26.5 million for the full year 2008. This compares with $6.2 million and $20.9 million for the same periods in 2007. The reason for this increase includes the continued investment in the Company's sales and marketing functions, legal fees associated with litigation, increased bad debt allowance, additional research and development expenses as well as higher amortization charges incurred primarily as the result of the acquisitions of both Orbit One and Ublip.
The Company is tightly controlling costs and in the last several months has reduced administrative and support expenses. As a result of this and other cost control actions, general and administrative expenses, excluding legal litigation fees, were lower in 2008 than in 2007. In accordance with Financial Accounting Standard No. 123(R) the Company recorded non-cash stock option compensation costs of $301,000 and $1,158,000 in the fourth quarter and full year 2008, respectively.