BlackBerry has terminated its licensing deal with T-Mobile, which will no longer be allowed to sell BlackBerry devices after April 25, the company has announced. An email sent to T-Mobile customers using BlackBerry devices promises that their phones will continue to work and that “BlackBerry will work closely with T-Mobile to provide the best possible customer service to any customer remaining on the T-Mobile US network” or purchasing from the carrier’s stock.
The announcement follows a bitter back-and-forth between the two companies, during which T-Mobile offered $200 to consumers who traded in BlackBerry devices, a move BlackBerry CEO John Chen described as a “clearly inappropriate and ill-conceived marketing promotion.” Consumers might not have agreed: TmoNews reported that 94 percent of those who traded in their phones switched to competitive platforms instead of buying a new BlackBerry product.
T-Mobile also advertised the iPhone 5s, the flagship smartphone Apple announced in 2013 and T-Mobile offered for free earlier this year, as a “great offer for BlackBerry customers.” BlackBerry’s email to its customers has responded in kind, with a promise that it “will do everything in [its] power to ensure a smooth transition should you choose another carrier” and a $100 discount on BlackBerry products purchased through its online store. Shots, fired.
Reactions from around the Web
The Associated Press notes that Chen is shifting focus away from BlackBerry’s hardware business anyway:
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.
Reuters places this change in focus, and Chen’s arrival at the company, in context:
BlackBerry had dominated the smartphone market until about four years ago, but its market share has dwindled as it failed to keep pace with Apple Inc’s iPhone, Samsung Electronics Ltd’s line of Galaxy devices and devices powered by Google Inc’s Android operating system.
A new line of BlackBerry 10 devices introduced last year flopped, and Chen has begun to shift the company’s emphasis away from hardware sales and toward managing smartphone services.
The Verge reports that the termination of this deal might not be permanent:
BlackBerry says that current T-Mobile customers using its devices ‘should not see any difference in their service or support,’ and that the two companies will work together to provide ‘the best customer service’ to any users remaining on the network. Given the companies’ histories and current trajectories, the move appears final, but Chen left the door open for a possible reunion in the future. ‘We hope to work with T-Mobile again in the future when our business strategies are aligned.’
Pando weighs in
Paul Carr wrote about his trip to a T-Mobile store in search of a BlackBerry product in June 2013 and accidentally showed why today’s announcement might not bother too many people:
The store was practically empty. The only other people in there were buying iPhones. When I asked the assistant (who IIRC was called Asia, and who was utterly brilliant, by the way) about the Q10 she seemed almost shocked. “Yes!” she near-yelped, “We have it!”
As we completed the paperwork, another member of the in-store team came over to confer with Asia. They seemed slightly embarrassed, but only slightly. “Uh, can I ask you a favor?” Asia asked.
Apparently T-Mobile HQ had asked the store to take a photograph of the first person to buy a Q10 that day. That person was me.
[Illustration by Hallie Bateman for Pando]