BlackBerry Screws Itself, Won’t Renew T-Mobile Reseller Contract

| Analysis

BlackBerry CEO John Chen is apparently still upset over T-Mobile's trade-in-your-BlackBerry promotion because he won't be renewing the carrier's license to sell his company's smartphones. For T-Mobile, this isn't that big of a deal, but for BlackBerry it's yet another nail in its coffin -- a nail it's driving in itself.

It's almost like BlackBerry has a death wishIt's almost like BlackBerry has a death wish

"BlackBerry has had a positive relationship with T-Mobile for many years," Mr. Chen said. "Regretfully, at this time, our strategies are not complementary and we must act in the best interest of our BlackBerry customers."

T-Mobile rubbed smartphone maker the wrong way earlier this year when it launched a promotion to switch its BlackBerry carrying customers to the iPhone. Mr. Chen was upset that T-Mobile didn't consult with him ahead of running the promotion, and called T-Mobile's plan a "clearly inappropriate and ill-conceived marketing promotion," never mind the fact that resellers typically don't ask vendors for approval before running promotional events.

Despite the grandstanding from BlackBerry, losing the company's smartphones shouldn't have much of an impact on T-Mobile's bottom line. The carrier hadn't been selling many BlackBerry devices, and last year scaled back its lineup to just two models.

As part of today's announcement, Mr. Chen said, "We hope to work with T-Mobile again in the future when our business strategies are aligned." That's nice talk, but considering the strained relationship between the two companies, and T-Mobile's already limited BlackBerry sales, it isn't likely the two will work together again.

There was a time when BlackBerry was the top name in the smartphone industry, but the company has failed to keep up in the new iPhone-driven market. BlackBerry has been bleeding away marketshare to Apple and Google's Android OS platform at an alarming rate, and has been losing many of its corporate customers -- its bread and butter market.

The license expires on April 25, and while you won't be able to buy a BlackBerry device from T-Mobile, they will still work on the carrier's network. Both companies are committed to supporting their current BlackBerry users, which should come as some consolation for those that are still on T-Mobile's network.

For BlackBerry, the move cuts off a continuing, if small, revenue source at a time when every dollar it brings in counts. Limiting your revenue stream when you're already facing retail obscurity seems like a dangerous business model at best.

As of October 2013, for example, BlackBerry held only 3.6 percent of the smartphone market, according to data from comScore. Apple held 40.4 percent of the market, and Google's Android OS accounted for 51.8 percent.

BlackBerry's decision to drop T-Mobile's reseller contract looks like a move to hurt the carrier, but it feels more like cutting off your nose to spite your face. BlackBerry's future looks pretty grim, and the company isn't doing itself any favors. Mr. Chen, and the company leaders that came before him, have pretty much handed over the smartphone market without a fight. Apple and Google should send him a fruit basket, or at least a thank you note.

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Comments

geoduck

I keep hearing, from BB users up here, that BB will come back. After all Apple nearly folded and recovered. The thing they don’t understand is John Chen is no Steve Jobs. BB is in a death spiral and its only hope is a buy out. Right now I would not be surprised to see a Nortel style collapse and bankruptcy fire sale.

jfh17

From the article title it sounds like LackBerry finally listened to the public’s requests.

John Dingler, artist

Hi Jeff,
Sounds like a death watch article. *S*

I do not have negative feelings toward Blackberry as I do toward Nokia, Dell, Schmidt, and Microsoft. I hope that Blackberry makes a comeback. If someone can make a case to hate Blackberry, I would be interested.

GraphicMac

“...our strategies are not complementary…”

Huh? Their strategies are 100 complementary. They both want to sell phones. The problem is that Blackberry has a ton of phones, and T-Mobile can’t bribe anyone to buy them.

Terrin

Blackberry is acting as if T-Moble has treated them differently than other device makers. I have been a T-Mobile customer for around six years. I am an iPhone user. Yet, T-Mobile occasionally sends me out texts announcing competing products like Samsung or HTC devices. It annoys me, but T-Mobile was not singling out Blackberry anymore than other device manufacturers.

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