BlackBerry CEO assails T-Mobile US promo as "ill-conceived"

TORONTO Wed Feb 19, 2014 4:42am IST

A man walks by a Blackberry sign at the Blackberry campus in Waterloo, September 23, 2013. REUTERS/Mark Blinch/Files

A man walks by a Blackberry sign at the Blackberry campus in Waterloo, September 23, 2013.

Credit: Reuters/Mark Blinch/Files

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TORONTO (Reuters) - BlackBerry Ltd (BB.TO) (BBRY.O) Chief Executive John Chen fired a salvo at T-Mobile US Inc (TMUS.N) on Tuesday, calling ill-conceived a promotion run by the company that encourages customers using BlackBerry smartphones to upgrade to iPhones.

T-Mobile US, which is majority owned by Deutsche Telekom AG (DTEGn.DE), sent out emails to some of its customers last week, pitching them free iPhone 5s and touting the promotion as a "great offer for BlackBerry customers".

That sparked a brouhaha in social media forums after some of the telecom company's loyal BlackBerry client base reacted angrily to the offer, which they perceived as a slight.

The backlash prompted T-Mobile US Chief Executive John Legere to respond publicly. In a Twitter posting on Sunday, Legere said T-Mobile would continue to support BlackBerry smartphones and he assured BlackBerry users that they do not have to give up their devices or "loyalty".

In a blog post on Tuesday, BlackBerry CEO Chen slammed the T-Mobile US offer as a "clearly inappropriate and ill-conceived marketing promotion" and he thanked the BlackBerry user base for their loyalty to the company.

"Your partnership with our brand is appreciated by all of us at BlackBerry, and draws a sharp contrast with the behavior of our longtime business partner," Chen said in the posting, noting that T-Mobile had not discussed its promotion with BlackBerry.

BlackBerry, a one-time pioneer in the smartphone industry, has been struggling in recent years to claw back market share lost to Apple Inc's (AAPL.O) iPhone, Samsung's (005930.KS) Galaxy devices, and other smartphones powered by Google Inc's (GOOG.O) Android operating system.

The Waterloo, Ontario-based company's new line of BlackBerry 10 devices has so far failed to win back market share, and Chen is attempting to reshape the company and focus less on the handset segment, and more on the company's services business.

Chen has stressed, however, that the handset business remains a core component for BlackBerry as the company attempts to engineer a turnaround.

Chen called on T-Mobile US to "find a way forward that allows us to serve our shared customers once again".

T-Mobile could not be reached immediately for comment.

(Reporting by Euan Rocha; Editing by Peter Galloway)

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