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Wednesday, April 02, 2014, 05:01 pm PT (08:01 pm ET)

BlackBerry cuts ties with T-Mobile, signals new carrier-independent business strategy

Beleaguered handset maker BlackBerry on Tuesday said it would be severing ties with U.S. wireless carrier T-Mobile, suggesting the company is reducing reliance on carriers to sell product.

Q10

BlackBerry Q10. | Source: BlackBerry


As noted by The Wall Street Journal, BlackBerry's unexpected decision to not renew its contract with T-Mobile is a departure from handset maker's usual strategy of leaning on carrier marketing to drive sales. The company last year announced plans to discontinue service fees applied to carriers for routing BB Messenger traffic through its own servers.

"Regretfully, at this time, our strategies are not complementary and we must act in the best interest of our BlackBerry customers," said BlackBerry CEO John Chen. "We hope to work with T-Mobile again in the future when our business strategies are aligned."

The move comes some two months after company CEOs exchanged barbs over a promotion for Apple's iPhone 5. At the time, T-Mobile sent out emails detailing a "great offer for BlackBerry customers," suggesting they switch over to Apple's smartphone. In a post to BlackBerry's official blog in February, Chen expressed "outrage" at T-Mobile, which apparently did not discuss the deal prior to sending out the promotional emails.

While Tuesday's announcement was not based solely on the iPhone 5 flap, BlackBerry's shift in strategy can be viewed as symptomatic of the firm's struggle to remain relevant in a quickly-changing smartphone landscape. Even top-level executives are jumping ship, including SVP of Software Sebastien Marineau-Mes, who was sued to fulfill his contract terms with BlackBerry after being poached by Apple last year.

With a less than one-percent share of the U.S. smartphone market, which according to research firm IDC is down drastically from about 50 percent five years ago, the Canadian company is seemingly flailing about in what could be its final death throes.

In usual form, T-Mobile CEO John Legere took to Twitter, offering a blunt — if not brusque — commentary on the situation.

"We value all customers but this is 1+% of our base total and a small fraction of what we add quarterly," Legere said. In a follow-up tweet directed at a follower, the executive said, "I can't, for the life of me, understand why @BlackBerry would take choices away from customers."

For its part, BlackBerry promised to work with T-Mobile to ensure current customers are unaffected by the contract cancellation, but it has yet to outline a solution that will cover revenue lost by the contract non-renewal.