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T-Mobile Backtracks on iPhone Promo for BlackBerry Users

T-Mobile Backtracks on iPhone Promo for BlackBerry Users
February 20, 2014 11:13AM

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Once the top smartphone maker, BlackBerry has been struggling to regain market share. According to the latest statistics compiled by International Data Corp., the company had just 0.6 percent of the global market share in the fourth quarter of 2013, down from 3.2 percent in the same quarter of 2012. T-Mobile's iPhone promotion had to sting.

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In a blatant show of OEM favoritism, T-Mobile recently asked its subscribers using older BlackBerry devices to trade them in for a shiny new iPhone. The fourth-largest carrier by subscriber base e-mailed its BlackBerry customers and reminded them they could have an iPhone 5S with no money down.

But after a backlash from BlackBerry and some of its remaining loyal customers, the carrier on Thursday shifted gears and announced an offer for BlackBerry users to get a $200 rebate for upgrading to any phone, including BlackBerry devices, while kicking in an extra $50 for those who pick the newest BlackBerry models, the Q10 or B10.

In a further gesture of conciliation, T-Mobile will offer free expedited shipping on BlackBerry devices that are unavailable in stores, said Mike Sievert, T-Mobile chief marketing officer.

We Were Good Together

Visitors to T-Mobile's site Thursday were greeted with a special offer for BlackBerry users, and those selecting Learn More got to read the letter from Sievert saying, "The passion we've seen from the BlackBerry Loyal over the past couple days has been pretty amazing."

The letter was in response to a blog post by BlackBerry CEO John Chen. In that indignant message, Chen declared that "our long-standing partnership was once productive and profitable for both BlackBerry and T-Mobile. I hope we can find a way forward that allows us to serve our shared customers once again. Notwithstanding the current challenge, we remain very excited about BlackBerry's future."

Chen thanked t-Mobile customers for "expressing your outrage directly to T-Mobile ā€ˇthrough tweets, calls and comments in the media and on blog posts."

Once the top smartphone maker, BlackBerry has been struggling to regain market share. According to the latest statistics compiled by International Data Corp., the company had just 0.6 percent of the global market share in the fourth quarter of 2013, down from 3.2 percent in the same quarter of 2012.

T-Mobile's initial message to BlackBerry users appears to show some frustration with unpredictable supply and demand.

"I am sure they would like to be rid of guessing how many BlackBerrys will be sold in a market where they are getting burned by excess inventory," said Gartner Research analyst Ken Dulaney.

Loyal Diehards

But T-Mobile may have misjudged the extent of brand loyalty.

"With any transitions there are the diehards who are vocal," Dulaney told us. "So the minority spoke and T-Mobile said there are enough of you for me to take notice and they did."

But another analyst, Neil Shah of Counterpoint Research, said T-Mobile's base of loyal BlackBerry users are likely using less-efficient 2G/3G rather than upgrading to high-speed 4G LTE phones.

"Hence, since T-Mobile is not stocking LTE BlackBerry phones, the obvious strategy for T-Mobile is to switch them to iPhones and clear iPhone inventory," Shah told us. That would generate more revenue per user while switching subscribers to a brand with better loyalty.

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