Blackberry ends licensing deal with T-Mobile

This could not have come at a worse time for Blackberry, which is struggling to remain profitable, having announced a 64 percent drop in Q4 revenues.
By Ananth Baliga  |  Updated April 2, 2014 at 5:43 PM
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WATERLOO, Ontario, April 2 (UPI) -- BlackBerry has decided not to renew its licensing agreement with T-Mobile, after disagreements between the two companies over an ad promoting Apple's iPhone.

BlackBerry has said the service provider will no longer sell any of its devices once the contract between the companies ends on April 25. BlackBerry has assured its customers that it will not see any difference in services or support. The company is also working with other carriers to give customers an alternative, should they decide to transition to a new service provider but remain BlackBerry users.

“BlackBerry has had a positive relationship with T-Mobile for many years,” BlackBerry CEO and executive chairman John Chen said in a statement released Tuesday night. “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.”

The troubles for the two companies seem to have started last September, when T-Mobile decided to permanently remove BlackBerry devices from all stores. David Carey, T-Mobile executive at the time, said that with low sales of BlackBerry phones it was "inefficient" to keep stocks in their distribution system. They would offer to ship the device to customers who ordered them.

But in February, T-Mobile sent its BlackBerry customers a promotional email, titled "Great offer for BlackBerry customers," which offered customers a chance to switch over to the iPhone 5S and promised "powerful communications and productivity apps with the ease of use that Apple is known for."

At the time, Chen wrote in a blog, "What puzzles me more is that T-Mobile did not speak with us before or after they launched this clearly inappropriate and ill-conceived marketing promotion."

BlackBerry users and loyalists were also outraged and took to social media to vent their anger at the "inappropriate and ill-conceived" promotion.

This break up comes at a difficult time for BlackBerry, which has been struggling to return to profitability, having reported a 64 percent drop in Q4 revenues. The stock got a small lift for the better-than-expected net loss.

[BlackBerry] [Fox News]

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