The sufferings of
) continues with
T-Mobile U.S. Inc.
), one of the big four U.S. telecom carriers, deciding to stop
stocking BlackBerry smartphones in its stores. The news came a
couple of days after the Canadian handset manufacturer agreed to
divest its entire stake to Toronto-based insurance company
Fairfax Financial Holdings Ltd. for $4.7 billion, or $9 per
T-Mobile U.S. announced that it will continue to endorse
BlackBerry devices and take customer orders at its retail stores.
However, the smartphones will be shipped directly to customers
instead of giving them an option to handpick them at its stores.
T-Mobile U.S. will continue to sell BlackBerry smartphones
Shareholders of BlackBerry reacted negatively since the news
came out as the stock lost 6.8% of its value on Nasdaq. T-Mobile
U.S. on the contrary had a better outing on the bourse as its
stock price gained 2.68% since Wednesday.
T-Mobile's decision does not come as surprise as BlackBerry
reported dismal preliminary results for the second quarter of
fiscal 2014. For the third quarter, BlackBerry expects to report
a GAAP net loss of nearly $950 million to $995 million or around
$1.81 to $1.90 per share along with a 45% annualized decline in
BlackBerry, which is known for its secured email service
continues to lose market share in a crowded smartphone market
) iPhone and
) Android-based devices. This quarter hasn't been any expectation
as the company is expected to report smartphone sales of 3.7
million, down 50% year over year.
Unlike T-Mobile, two of its bigger rivals AT&T Inc. and
Verizon Wireless have decided to sell BlackBerry devices from
their retail outlets. It is believed that AT&T and Verizon
Wireless could follow the path of T-Mobile if the beleaguered
handset manufacturer fails to improve its performance.
Losing T-Mobile is apparently just another of the many
setbacks that BlackBerry is currently facing. But we believe that
losing a carrier partner like T-Mobile is a grave concern as it
will eventually impact its sales, given its expanded network.
Currently, T-Mobile U.S. carries a Zacks Rank #3 (Hold).
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