BlackBerry Leaving T-Mobile in April, Says Strategies Not "Complementary"
April 2, 2014 12:25 PM
comment(s) - last by
The final day of BlackBerry and T-Mobile's existing contract is April 25, 2014
BlackBerry wasn't too happy with T-Mobile when the carrier launched what seemed like an
in February, so BlackBerry is cutting ties.
According to a BlackBerry
, the Waterloo, Ontario-based company will not renew its contract with T-Mobile when it expires in April.
However, BlackBerry said it will make sure that existing BlackBerry customers with T-Mobile will see continued support and service -- even after the April deadline.
“BlackBerry has had a positive relationship with T-Mobile for many years. Regretfully, at this time, our strategies are not complementary and we must act in the best interest of our BlackBerry customers. We hope to work with T-Mobile again in the future when our business strategies are aligned,” said BlackBerry CEO and Executive Chair, John Chen.
“We are deeply grateful to our loyal BlackBerry customers and will do everything in our power to provide continued support with your existing carrier or ensure a smooth transition to our other carrier partners."
BlackBerry even took a small jab at T-Mobile, saying that long-term BlackBerry users have other carriers to consider for continued support, and showed them where to look if they decide to do so.
The feud between BlackBerry and T-Mobile began in February, when T-Mobile presented a $200 trade-in offer for BlackBerry users that aimed to get them an iPhone for a great price. This led to a lot of fuss from BlackBerry fans and CEO Chen, who called the promotion "inappropriate and ill-conceived."
The campaign that started it all [SOURCE: Android Dissected]
T-Mobile tried to make it right by offering an extra $50 for users who decided to trade-in an old BlackBerry device in favor of a new one like the Z10 or Q10.
However, that extra $50 didn't seem to make much of a difference. The trade-in campaign resulted in
94 percent of old BlackBerry devices being traded
for smartphones made by the company's competitors.
The offer ended in early March, and T-Mobile noted in an internal memo that the promo led to a 15x increase in BlackBerry trade-ins.
BlackBerry really didn't need to lose any extra customers at this time, considering the company is already having major troubles. For instance, last year, BlackBerry had a full year net loss of $5.4 billion USD on revenue of $8.6 billion USD. It's latest operating system and line of devices -- BlackBerry 10 (BB10) -- had largely flopped as well.
To make matters worse, fewer than half as many BlackBerry Enterprise Servers (BES) were in use as there were three years previous, and market capitalization had fallen from $83 billion USD in mid-2008 to a mere $3 billion USD late last year.
Overall, BlackBerry devices represented less than 1 percent of global smartphone shipped in the final quarter of last year.
Just last week, the Canadian mobile company reported revenues of $976 million in Q4 2013, which was down 64 percent from the $2.7 billion it reported in the year-ago quarter. This is also the first time BlackBerry has
had less than $1 billion in quarterly revenue
BlackBerry's loss was $42 million for the quarter, which was down from the $94 million it earned a year previous. BlackBerry still has about $2.7 billion in the bank, but that's down $500 million from what it had last quarter.
The final day of BlackBerry and T-Mobile's existing contract is April 25, 2014.
This article is over a month old, voting and posting comments is disabled
4/2/2014 3:10:08 PM
I get it, John Chen wants the world to know he is an angry prick.
Sue your employee that's jumping ship, sue someone for leaking info but don't burn bridges with a carrier with a massive revenue share.
T-mobile selling 5% BB devices will generate RIM more revenue than all of the Canadian carriers selling 20% RIM devices (vs all devices sold).
RE: Dumb move
4/3/2014 2:29:53 AM
Doesn't really pan out that way. Also there were forum posts on the trade-in that store reps were overriding offers to equal the max discount you would've gotten if you selected anything other than a blackberry.
It may not seem like it doesn't look sensible for Blackberry right now but there is a financially sensible move with not sticking around with a vendor who likes to shoot you in the foot. Likewise most shoppers aren't going to T-mobile because they want a blackberry; they are either existing customers and want an Android/iPhone with an inexpensive plan.
Most ppl who are shopping for blackberry at t-mobile want a blackberry and if the math for costs are correct, if they can entice just these customers to buy direct from Blackberry, they may only need to make only 50% of the sales they did with T-Mobile and that's not exactly an impossible goal either.
These are gambles, much like retailers on Thanksgiving was awesome; they can score big or their plans can backfire. at this stage Blackberry can take these risks because it has nothing to loose and free up personal to support other sales channels.
A guy next to me was interested in buying a Mach Trio tablet for $49 because it was cheap and simple. I was tinkering with an $89 Lenovo tablet and thought that the mach was the stupidest tablet to buy. Point is he came in there to look for that and just that because it's what they wanted. You may say T-Mobile is big for selling phones but they aren't really, they're in decline a bit as they focus on plans. My Google Nexus was $349.99 on Google Play. Google Nexus 4 was $349.99 after contract. Same story with blackberry: it's a focus on how customers shop, support for those who actually buy a phone and risks/gains involved. If this were Verizon or AT&T, I think BlackBerry wouldn't have acted so because TMobile has a different strategy and it's been championed for over a year: they'll unlock your phone. If that's T-Mobile's direction it's not like they're pushing out a desire to sell a phone at all but gain subscribers [because that's where all of the money is].
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