China to Introduce BlackBerry

Within months, China Telecom will introduce BlackBerry smartphone produced by Research In Motion Limited (RIM, Nasdaq: RIMM), disclosed a top executive of eSurfing Telecom Terminal Co., Ltd. Meanwhile, the leading Chinese mobile carrier is talking with Palm (Nasdaq: PALM | Quote | Chart | News | PowerRating) over possible cooperation.

Deutsche Bank (NYSE: DB) points out in a report that iPhone and BlackBerry will only account for 5% of the world's gross mobile phone sales in 2009, but their operating profits will take up 58% of the total.

IPhone and BlackBerry are currently the best selling smartphones around the globe. Their sales are bundled with carriers. Sanford Bernstein estimates that iPhone's operating profit margin reaches 40%. That of BlackBerry hits 20.7%.

Users could receive and make phone calls or send and receive emails through BlackBerry. In the past ten years, RIM sold 65 million BlackBerry smartphones to 28.5 million users. Meanwhile, its market cap surged from USD 96 million to USD 42 billion.

Apple Inc. (Nasdaq: AAPL) made a success through APP Store, which has more than 65,000 applications and 1.5 billion times of download. The company shares 70% of its sales revenues with software developers; while RIM's sharing proportion is 80%.

RIM has cooperation with over 500 telecommunications carriers in more than 170 countries and territories worldwide, revealed the company's China president Gregory Shea.

Hence, RIM will not cooperate exclusively with one carrier in China. It is also contacting with China Unicom, exposed an insider of Unicom Huasheng Telecommunications Technology Co., Ltd.

Actually, RIM inked a cooperative agreement with China Mobile in May 2006. Its customers in China include Ping An Insurance (Group) Company of China Limited (SHSE: 601318 and SEHK: 2318), CITIC Securities Co., Ltd. (SHSE: 600030), China COSCO Holdings Co., Ltd. (SHSE: 601919), and Shanghai Baosteel Group Corporation.

However, China Mobile has not introduced any new models in the following three years. Currently, it only provides one model of BlackBerry, with service packages ranging from CNY 398 to CNY 598 per month.

This time, China Telecom will promote three new models along with BlackBerry Internet Service (BIS) and BlackBerry Enterprise Server (BES). Its monthly subscription fee is less than CNY 100 at the lowest.

In 2008, China's mobile phone market only rose 6% to 7%. Meanwhile, its growth in the smartphone sector reached 20%. CCW Research expects that the segmented field will jump 30% in 2009 and account for 40% of the whole market in 2012.

(USD 1 = CNY 6.83)

Source: dycj.ynet.com (November 24, 2009)

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