Citigroup: RIM Stands to Benefit from JetBlue's WiFi Plan

On Dec. 11, JetBlue Airways Corp. (JBLU) will reportedly begin a trial to provide free in-flight e-mail and messaging via a WiFi connection on a specially equipped A320.

If passengers respond positively, the airline said it could install the service across its entire fleet, Citigroup analyst Jim Suva told clients in a note. The in-flight WiFi service will be available on laptops and WiFi enabled BlackBerrys (8210, 8820 and 8320 Curve), he added.

The Wall Street Journal reported that JetBlue has been working on this for months with partners Yahoo Inc. (YHOO), and Research In Motion Ltd. (RIMM).

This is incrementally positive for RIM, the analyst said, given that a portion of business travelers prefer to travel with a BlackBerry alone. He thinks JetBlue’s announcement will help reinforce this trend and will likely stimulate replacement unit sales.

However, Mr. Suva says he is holding off on increasing his estimates for RIM. He did say a 2.5% gain for replacement sales in 2008 would boost his earnings per share estimate by $0.05 for next year.

RIM remains his top pick in the North American handset space despite recent volatility for the stock and macro/subprime fears.

Mr. Suva’s price target is $140.

Comments

[Lisa]

They must have worked incredibly hard to make this non-open-platform, ie. just internet access with open email.