Is BlackBerry Loyalty Waning?

Source: BlackBerry.

BlackBerry (NASDAQ: BBRY  ) users are typically considered a particularly loyal bunch. But T-Mobile's (NYSE: TMUS  ) latest promotion proved that even the most dedicated of tech fans can have wandering eyes.

A very uncarrier move
Last month, T-Mobile launched a limited promotion offering its BlackBerry customers a special deal to switch to an iPhone 5S. That resulted in a lot of BlackBerry loyalists speaking out against T-Mobile on social media sites, and sparked a public argument between BlackBerry CEO John Chen and T-Mobile chief John Legere.

Chen called the promotion "inappropriate and ill-conceived," while Legere poked fun at Chen by saying he wanted to respond to him on Twitter, but since Chen wasn't on the social network he'd look him up on MySpace. T-Mobile tried to smooth things over by offering free shipping to people who ordered BlackBerry devices, and then launched a promotion in which users would get a $200 credit if they switched to an iPhone or Android phone, or $250 if they bought a new BlackBerry.

So what was the result of the promotion?

According to an internal T-Mobile memo acquired by the blog TmoNews, 94% of BlackBerry owners who signed up for the promotion switched to a non-BlackBerry device. T-Mobile's chief marketing officer said the promotion that ended Wednesday resulted in 15 times the normal BlackBerry trade-ins.

To be fair, this is just one short-lived campaign by a single carrier, and we don't even know how many actual customers switched from BlackBerry to another brand. But we do know that despite the backlash from BlackBerry loyalists when T-Mobile first launched the promotion, it appears not every BlackBerry user is as devoted.

No room for error
BlackBerry thinks its loyal fans can help turn the company around, and it just introduced the Q20 device a few weeks ago to help make that happen. The Q20 has physical buttons, a trackpad and QWERTY keyboard -- reminiscent of BlackBerrys of old. Chen said in a statement that the phone was designed "to give you the distinct experience that every BlackBerry QWERTY loyalist and high-productivity business customer absolutely loves."

But catering to the loyalists won't be enough. Whether BlackBerry has a strong following may not matter much, in light of how the company has failed to gain new converts. This past quarter BlackBerry sold just 1.1 million BB10 devices. Loyalists or no, the company won't turn itself around with sales like that. Investors should look to how well the company can sell the Q20 and the new Z3, but based on current sales the situation doesn't look promising. 

I'm doubtful either of the devices will garner the sales the company needs. Even the launch of the new BB10 operating system last year didn't get consumers to open their wallets to change BlackBerry's fate. If there's any time BlackBerry loyalists need to show their support, it's now.

1 stock to own in 2014
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2866227, ~/Articles/ArticleHandler.aspx, 8/30/2015 4:23:01 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Chris Neiger

Chris has covered Tech and Telecom companies for The Motley Fool since 2012. Follow him on Twitter for the latest tech stock coverage.

Today's Market

updated 1 day ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 3:59 PM
BBRY $7.37 Up +0.18 +2.50%
BlackBerry CAPS Rating: *
TMUS $40.00 Up +0.06 +0.15%
T-Mobile US CAPS Rating: ***
TWTR $26.83 Up +0.37 +1.40%
Twitter CAPS Rating: ***