BlackBerry’s Split with T-Mobile Doesn’t Look Smart

Wed, 04/02/2014 - 10:55am
Ben Munson

April Fools’ Day is over, right? Technically, news of BlackBerry not renewing T-Mobile’s license to sell its phones came yesterday. But we checked and, it’s real.

That means BlackBerry, a once-mighty handset maker that is now barely clinging to life, told the hottest U.S. carrier that it can’t sell BlackBerry devices anymore. This move seems counter-intuitive to say the least.

BlackBerry is hardly out of the woods but a string of small wins signaled a faint light at the end of the tunnel. The company’s outlook brightened as CEO John Chen was able to cut costs faster than expected. And the BlackBerry was even able to put the kibosh on Typo, the iPhone accessory that was clearly borrowing design tips from BlackBerry’s iconic keyboard.

Now that small spark of a comeback seems to have already met a wet blanket. But could this drastic move boil down to a simple—apparently butthurt—response to T-Mobile’s email offer in February. The carrier offered its BlackBerry users a special deal on switching to an iPhone and the BlackBerry loyal did not take it well. That’s saying little of the outrage Chen uncorked in an angry blog post.

This rift likely goes deeper than that. For as mad as he seemed, Chen probably wouldn’t issue such a potential blow to BlackBerry’s sales over an argument. Of course, if that’s the sole root of this move, there’s always a chance that this will reflect well on BlackBerry, presenting the struggling OEM as a proud and principled company, even in the face of imminent collapse.

In Comscore’s latest figures for smartphone OS market share in the U.S., BlackBerry’s slice of the pie was still shrinking, down to 3.1 percent at the end of January. Meanwhile T-Mobile has now added a million-plus subscribers in three consecutive quarters and its un-carrier talk is walking the walk, pulling the other major U.S. carriers into a small-scale pricing skirmish.

BlackBerry didn’t completely write-off T-Mobile and left things open for a reconciliation, a move that could signal this split as a means to an end for BlackBerry’s relationship with T-Mobile. And if BlackBerry returns to T-Mobile’s device portfolio with a stronger presence, BlackBerry’s bold move will likely get the credit.

So, this could all work out in the end. But for right now, it’s a real head-scratcher.


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