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BlackBerry-T-Mobile Divorce Over iPhone Promo 'Was Inevitable'

By Kimberly Koerth
April 03, 2014 - News

BlackBerry, which has suffered a deluge of customer defections over the past several years, has severed its ties with T-Mobile USA after a promotion in February caused unresolved tension.

In an email promotion, T-Mobile targeted BlackBerry users on its network that would allow them to switch from their device to an Apple iPhone for $0 down.

BlackBerry CEO John Chen responded with outrage at the time and now has announced that the company will not renew T-Mobile's license to sell its products when it expires on April 25. The move comes after years of the two companies working together.

Chen said in a statement that the two companies' strategies "are not complementary" but that he has hopes of working with T-Mobile again in the future.

T-Mobile had offered a second promotion offering BlackBerry users $200 in credit when they traded in their device for any new T-Mobile phone, a move that was successful for the carrier but even more embarrassing for BlackBerry, the Los Angeles Times reported.

“Wireless carriers have to strike a balance between providing customers choice and streamlining their portfolio," Recon Analytics founder and lead analyst Roger Entner said. "T-Mobile is choosing to streamline their portfolio and focus on the larger brands, whereas the other carriers seem to be more focused on providing customers choice and giving the Blackberry smartphone ecosphere more time to hopefully gain traction. The risk any carrier is taking when they discontinue a handset provider is that they might be seen to have 'blood on their hands' if that handset manufacturer dies."

While T-Mobile's sales of BlackBerry phones were only a drop in the bucket when compared to the Canada-based manufacturer's global sales, it comes in a market where BlackBerry can ill afford to lose more customers. The former Research In Motion has been playing catch-up to Apple and a bevy of Android manufacturers who have blown past it in both the consumer and business spaces, most notably in the U.S. and Western Europe, the most lucrative regions in the world.

“Like spouses that fight over a mother-in-law at family parties, this divorce was inevitable, noted Wally Swain, VP of research for Yankee Group, commenting on a Reuters article about the separation. "After T-Mobile's ‘dump your BlackBerry’ campaign and John Chen’s vigorous defense of the brand, it was somewhere between imminent and eventual that the relationship would come to an end. They may have tried therapy, but it’s more likely only the lawyers talked to each other. ... Call it irreconcilable differences. At least there were no children to fight over; not even a dog.”

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