Citigroup analyst Daryl Armstrong said in an investor’s keynote that RIM’s Blackberry Connect program that allows Blackberry push-email technology on 3rd party devices will hurt future Blackberry sales.
“With nearly 70 percent of RIM’s revenue stemming from sales of its BlackBerry wireless e-mail device, the company must ensure customers keep buying its new models if its business is to expand,” Armstrong said referring to RIM’s heavy skew towards revenue percentage derived from hardware sales.
The analyst’s warning came as Asian carrier SingTel announced on Wednesday that it is the first operator in the world to bring Palm’s Treo 650 smartphone with BlackBerry Connect to its customers.
“Some have argued that new BlackBerry Connect devices would lag in terms of functionality relative to RIM-manufactured products,” Armstrong wrote.
“This does not seem to be the case in this instance as the Treo 650 outstrips RIM devices in terms of features like attachment viewing … RIM needs replacement demand to grow revenues, more BlackBerry Connect competition hurts here.”
Separately, UBS analysts Robert Dennison and Maynard Um said their market checks suggest that pilots for BlackBerry service in Japan could start in 2006, with a commercial launch in the fourth quarter. That is ahead of their original expectation of a 2007 launch.