BlackBerry CEO Chen Puts Pride Before Profits by Dumping T-Mobile

By Wayne Rash  |  Posted 2014-04-06

BlackBerry CEO Chen Puts Pride Before Profits by Dumping T-Mobile

The public break-up by BlackBerry against T-Mobile has left onlookers bewildered, because of its apparent suddenness and because it seems destined to hurt BlackBerry far more than anything that might happen to T-Mobile.

If things go as they are now, BlackBerry is dumping T-Mobile as a carrier by the end of April. Although this looks like a disastrously stupid move by BlackBerry, there may be hope. Sources close to discussions between BlackBerry and T-Mobile indicate that once BlackBerry is over its hissy fit, the companies will patch things up. But for now it's just a mess.

Shortly before BlackBerry CEO John Chen announced to the world that he was terminating the company's agreement with T-Mobile to sell BlackBerry devices, I was having doubts of my own. My BlackBerry Z10 had just received an update to BBOS 10, which was acting strangely. By the time I was finishing up at a conference near San Francisco, the phone had lost the ability to make or receive calls, the calendar was history and the contacts would appear with random contact info.

By this time I was visiting friends in the Bay area, and the Z10 had become useless. Worse, BlackBerry's once-excellent tech support apparently had abandoned me. Unfortunately, I was headed for Interop the next week, and I needed a phone of some kind. So I headed into a mall in Santa Rosa, Calif., and visited the T-Mobile store. With the help of a very competent staff, I picked up an iPhone 5S and headed on my way. Why not buy another BlackBerry Z10? T-Mobile didn't carry them in its stores, leaving me with little recourse.

In this way my personal phone woes became part of a larger story. Back in February, T-Mobile's marketing mavens sent out an ill-considered email to BlackBerry users offering them a chance to upgrade to an iPhone. The offer was poorly conceived and even more poorly worded, resulting in a period of outrage from T-Mobile's BlackBerry customers. Chen apparently has stewed for a couple of months about BlackBerry's treatment by T-Mobile.

This all came to a head on April 2, when Chen, in a fit of what appears to be wounded pride, announced that T-Mobile was getting the boot. Chen then offered T-Mobile BlackBerry users a hundred bucks to switch to AT&T. T-Mobile responded by offering its BlackBerry customers the same amount to upgrade to a new BlackBerry or another phone to stay with T-Mobile and promised its BlackBerry customers that they would not lose support.

BlackBerry CEO Chen Puts Pride Before Profits by Dumping T-Mobile

If all of this looks to you like BlackBerry's Chen is in a snit because of T-Mobile's bungled promotion, you'd be right. But Chen has a track record of being in a snit, apparently. For example, he recently sued an executive for not giving enough notice before leaving to work for Apple. One wonders how the company thought this would be a good idea.

As things stand now, T-Mobile will have to stop selling BlackBerry devices at the end of April, although it can still dispose of any it has in stock. T-Mobile's CEO, John Legere, has pledged to continue supporting its BlackBerry customers with service, OS updates and so forth. One has to wonder how useful this will be if the updates BlackBerry provides to T-Mobile are as toxic as the one I got that effectively ate my phone.

T-Mobile has already said (in a tweet from CEO Legere) that BlackBerry customers make up about 1 percent of its total customer base. This means T-Mobile can afford to lose its BlackBerry customers and not suffer much. But that isn't the same situation for BlackBerry, which is struggling to recover from poor sales, loss of mindshare and the panicked flight of its top executives.

If there's one thing BlackBerry needs right now, it's to not alienate its existing customers and not make its potential customers assume the company is run by idiots. But you have to wonder what sort of CEO would voluntarily dump thousands of its most loyal customers because he was annoyed at a dumb mistake by a business partner. Clearly, there's a lot of pride at play here, mostly on BlackBerry's side.

At this point, it's impossible not to think of the quote from Proverbs, "Pride goeth before the fall," which seems appropriate here. If I were a BlackBerry stockholder (I'm not), I would have to wonder what my company's CEO is thinking when he lets his pride get in the way of rebuilding the company.

And unfortunately, that's what's going on here. It appears that Chen is still holding a grudge months after T-Mobile made a dumb mistake and tried to correct it. One has to wonder why he wasn't in touch with T-Mobile to discuss issues like this like (dare we say) an adult, resolve any differences well in advance and spend his energy on building up his business rather than tearing it down by trying to hurt another. Sometimes forgiveness is more than just a good idea. Sometimes it's also good business.

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