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A new strategy: Why BlackBerry cut its ties with T-Mobile

Puneet Sikka

Why Samsung attributes its smartphone success to its marketing (Part 2 of 5)

(Continued from Part 1)

BlackBerry severs ties with T-Mobile U.S.

A couple of weeks back, BlackBerry (BBRY) announced that it won’t renew T-Mobile U.S.’s (TMUS) license to sell BlackBerry products when it expires on April 25, 2014. Although this news came as a surprise, as historically, BlackBerry has depended a lot on telecom providers to sell its products, this action signals the start of a carrier-independent strategy from BlackBerry. T-Mobile is the fourth largest telecom provider in the U.S., and BlackBerry will continue to sell its products through the top three, Verizon (VZ), AT&T (T), and Sprint (S).

BlackBerry continues to struggle in the smartphone market

As the chart above shows, BlackBerry continues to struggle in the worldwide smartphone operating system market, with its share declining from 4.5% in 2012 to 1.9% in 2013. Android, iOS, and Windows Phone are the top three players in this market. Android completely dominates this market, with a share of about 79%. The company is now betting on new products in new markets for future growth. For example, BlackBerry plans to expand its Z3 smartphone to other regions, Southeast Asia and India, at an attractive price of about $200. The company also plans to launch another smartphone named “Classic” by the end of fiscal year 2015.

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BlackBerry’s strategy with T-Mobile isn’t complementary

According to BlackBerry CEO and executive chair John Chen, “BlackBerry has had a positive relationship with T-Mobile for many years. Regretfully, at this time, our strategies are not complementary and we must act in the best interest of our BlackBerry customers. We hope to work with T-Mobile again in the future when our business strategies are aligned. We are deeply grateful to our loyal BlackBerry customers and will do everything in our power to provide continued support with your existing carrier or ensure a smooth transition to our other carrier partners.”

Continue to Part 3

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