(Adds background, details, CEO comments)
By Euan Rocha
TORONTO April 2 BlackBerry Ltd said it
would not renew a deal allowing T-Mobile US Inc to sell
its products, a gamble by the smartphone maker as it struggles
to stabilize its business under an aggressive new chief
The move comes just six weeks after a public spat between
the two companies, as T-Mobile offered its customers the Apple
iPhone 5s for free in February and touted the promotion as
"great offer for BlackBerry customers."
A backlash to the iPhone offer prompted T-Mobile US Chief
Executive John Legere to respond, assuring Blackberry and its
users of his company's support. Chen, in a blog post at the
time, criticized T-Mobile for running the promotion.
In a statement late Tuesday, BlackBerry said it would
continue to provide service to existing customers on T-Mobile's
network or those who buy products from the carrier's remaining
"BlackBerry has had a positive relationship with T-Mobile
for many years," BlackBerry Chief Executive John Chen said in a
brief statement. "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."
BlackBerry did not elaborate on why it was ending its
relationship with T-Mobile U.S., the fourth-largest wireless
carrier in the United States. T-Mobile could not immediately be
reached for comment.
The phone maker said it was working closely with other
carrier partners to provide users with alternatives in case they
decide to switch from T-Mobile.
The three largest U.S. wireless carriers - Verizon Wireless
, AT&T Inc and Sprint Corp - continue to sell
The decision highlights a more combative stance since Chen
took charge of the Waterloo, Ontario-based company late last
year, and a focus on cutting costs in its sales channel.
During a roundtable with media at BlackBerry headquarters
last week, Chen said the company had done much of the internal
cost-trimming he had targeted when he took charge in November,
and further cuts would come within its sales channels.
"Now I am onto the next part of the cost (cutting), which is
the distribution costs of our product," he said at the time.
Chen didn't provide details but hinted that some of the
company's carriers and distributors were getting a significant
cut on the devices sold, which was squeezing its profit margins.
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.
(Additional reporting by Arnab Sen in Bangalore; Editing by