BlackBerry's Split With T-Mobile Doesn't Change Much

BlackBerry's device sales in the U.S. are already low, and dropping T-Mobile can't make it much worse.

Apr 2, 2014 at 12:30PM

So apparently BlackBerry (NASDAQ:BBRY) and T-Mobile (NASDAQ:TMUS) never quite smoothed things over from February's falling-out. BlackBerry announced today that it would no longer sell its devices through T-Mobile as of April 25.

While it's never good news for a device maker to stop selling its products through one of the major wireless carriers, BlackBerry investors have much more to be concerned about than the two companies parting ways.

Why split up?
Dropping T-Mobile from its list of carriers is likely the result of the magenta company's promotion back in February that offered $200 to any BlackBerry user to switch to an iPhone on T-Mobile's network. The offer spurred a backlash by BlackBerry loyalists online.

T-Mobile tried to smooth things over by offering a Blackberry promotion, but it was too late. About 94% of users who participated in the offer ditched their BlackBerry for another device.

Why neither company will suffer
BlackBerry's device sales in fiscal Q4 2014 were already pretty bad, and dropping T-Mobile isn't likely to make them any worse. The company only sold 3.4 million devices to end consumers and only 1.1 million of those were running the BB10 operating system.

BlackBerry's newer OS hasn't turned around the company as investors had hoped and now it's looking to tap into some nostalgia for future sales. The company's brining back its formerly popular BlackBerry Bold device, and is releasing its Q20 device with a physical keyboard -- harkening back to the company's heyday.

With device sales already so low, and BB10 failing to change the tide, BlackBerry doesn't have much to lose by cutting ties with T-Mobile. Consequently, with such low demand for BlackBerry devices, T-Mobile won't likely see much of a loss, either. The company will continue to support current BlackBerry devices, so any current customers can continue to pay for their plans if they choose.

Foolish final thoughts
The one thing that could potentially be hurt in all this is how BlackBerry loyalists perceive the company. Sure, BlackBerry has already lost its clout with most mobile consumers, but purposefully dropping a carrier should be a little unsettling for a group of users who are staunch supporters of the devices.

I can't help but view the T-Mobile and BlackBerry split as yet another small step into insignificance for the device maker. While the move doesn't change much for either company, it's still a telling sign that BlackBerry is slipping further away from mobile consumers. And, unfortunately, that's nothing new.

A better opportunity 
So far, BlackBerry's failed to turn its ship around, leaving investors who hoped for big gains pretty disappointed. Luckily, there's a new wave of tech that's coming into its own, and it's not even close to being too late for investors to get in on it. An ABI Research report predicts 485 million of them could be sold over the next decade, and you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this new report.

Fool contributor Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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