In dumping T-Mobile USA (NYSE: TMUS ) as a carrier, BlackBerry Ltd. (NASDAQ: BBRY ) has left the ranks of major smartphone suppliers. Apple, Google, and Microsoft all sell smartphones through each of the four major U.S. telecom carriers. Fool contributor Tim Beyers explains the implications for BlackBerry in the following video.
There isn't much for either company to mourn. BlackBerry now accounts for near zero U.S. market share according to the latest figures from Consumer Intelligence Research Partners. T-Mobile, meanwhile, is the nation's fourth-largest carrier. Parting ways may be more of a PR problem than a profit problem.
What caused the rift? Promotions strategy. In September, T-Mobile stopped carrying BlackBerry handsets in its stores. Months later, the carrier began running ads prompting users to switch to the iPhone. BlackBerry responded by terminating the relationship.
Investors' reactions to the news have been mixed. Shares of BlackBerry fell more than 10% between March 28 and April 3, a period that included mediocre earnings news. T-Mobile stock rose modestly during the same period.
Tim says the BlackBerry sell-off is probably an overreaction given the company's newfound emphasis on software and services, which should naturally reduce its dependence on carrier whimsy. Continued approval of BlackBerry handsets by U.S. Defense Department employees should also provide a buffer.
Even so, Tim says this is a stock story in transition from that of a major international smartphone supplier to that of a niche supplier of mobile software and services. Do you agree? Please leave a comment below to let us know what you think, and whether you would buy, sell, or short BlackBerry stock at current prices
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