BlackBerry ending US licensing deal with T-Mobile; says strategies no longer align

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NEW YORK, N.Y. – BlackBerry is ending its U.S. licensing deal with T-Mobile, saying the companies no longer have complementary strategies.

The disconnect appears to be related to a T-Mobile promotion that BlackBerry took issue with last month.

In a blog post in February, BlackBerry CEO and Executive Chair John Chen said that T-Mobile had emailed an offer targeting BlackBerry users on its network asking them to switch their BlackBerry devices to a competitor’s smartphone. Chen said that BlackBerry had not been told of T-Mobile’s plans in advance and thanked its customers for expressing their displeasure. Chen told its customers that BlackBerry was upset about the offer and that T-Mobile hadn’t spoken with the Canadian company before or after launching the promotion.

BlackBerry’s existing licensing agreement with T-Mobile U.S. Inc. expires on April 25.

Once the deal ends, BlackBerry customers on the T-Mobile network shouldn’t see any change in their service or support, Blackberry said.

BlackBerry Ltd., formerly known as Research In Motion, said that it will work with T-Mobile to help any BlackBerry customers remaining on the T-Mobile U.S. network or any customers buying devices from T-Mobile’s existing inventory.

BlackBerry said it’s also working with its other carrier partners to give its customers options should they want to switch to another carrier.

Chen said in a statement that the company hopes to work with T-Mobile again when their business strategies align.

The BlackBerry, pioneered in 1999, had been the dominant smartphone for on-the-go business people and other consumers before the iPhone debuted in 2007 and showed that phones can handle much more than email and phone calls. The BlackBerry has also been hurt by competition from Android-based rivals.

On Friday the company reported mixed fourth-quarter results as its adjusted loss was better than expected, but revenue — which dropped below $1 billion for the first time since late 2007 — fell short of analysts’ expectations.

BlackBerry is transitioning its business from a smartphone company to a software business under Chen, who is deemphasizing the hardware business after last year’s launch of the BlackBerry 10 failed to spark a turnaround.

Chen, who is credited with turning around Sybase, a data company that was sold to SAP in 2010, is putting more emphasis on BlackBerry’s mobile device management business, a collection of software that allows IT departments to manage different devices connected to their corporate networks. He is also emphasizing BlackBerry’s popular BlackBerry Messenger application that is now also available on Apple and Android devices. And he is trying to highlight Blackberry’s embedded QNX software systems, which are used in-vehicle infotainment systems and industrial machines.

BlackBerry’s stock rose 9 cents to $8.19 in midday trading Wednesday. Its shares are up almost 9 per cent so far this year.

2 comments on “BlackBerry ending US licensing deal with T-Mobile; says strategies no longer align

  1. As a Canadian who just moved back to the US after 2 years in Canada, I find this Blackberry decision quite funny. I traded in my 2008 Curve to T-Mobile for $200, then picked up another on Craigslist and 3 new prepaid units for $50 each at Walmart and ended up with a contract-free Nexus 5, 3 Alcatel phones I’m selling and $400 credit on my T-Mobile account (on a side note, try that with any Canadian carrier and be laughed out the door).

    TMo offered an extra $50 credit for buying a Blackberry during this promotion. I doubt few people did, just like me. BB is essentially dead in the consumer market due to falling flat on its face for years and becoming a joke in that market. At the several company-owned stores I visited in greater Atlanta, not one carried any BB handsets, although they were available online. The reason: zero customer demand.

    There’s no reason for a typical wireless consumer to keep a BB, anyway: a comparative desert of native apps and secure BBM now available as an Android app. Chen must remember that T-Mobile is in the business of T-Mobile and is in hand to hand combat in real competition, unlike the telecom oligarchy in Canada. I’m guessing customer satisfaction and loyalty went way up for former T-Mobile customers walking around with new iPhones or Android handsets after trading in units that are essentially worth next to nothing (or $0 in my Curve’s case) on the resale market.

    Reply

    • Oops! I meant to say: “I’m guessing customer satisfaction and loyalty went way up for former BLACKBERRY customers walking around with new iPhones or Android handsets…”

      Reply

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