T-Mobile US, Inc.’s (TMUS - Snapshot Report) trade-in program -- primarily for BlackBerry Ltd (BBRY - Analyst Report) customers -- further confirms the latter’s rapidly declining popularity. The deal promised BlackBerry users a lucrative $200 for those who opt to trade in their devices for a new handset.
T-Mobile’s trade-in deal worked in the company’s favor as the number of devices exchanged was fifteen times the usual. However, the program proved pricey for BlackBerry as 94% of Blackberry users shifted to rivals like Apple Inc.’s (AAPL - Analyst Report) iPhone or Google Inc.’s Android.
To make the deal more appealing, T-Mobile offered an extra $50 concession to customers who exchanged for a BlackBerry Q10 or Z10. However, this offer failed to boost Blackberry Q10 and Z10 sales as most of the customers opted for other mobile brands.
We believe that the Canadian handset manufacture is losing traction in the mobile market at a rapid pace. Thus, the company needs to introduce high-end devices to counter the growing competition in the handset manufacturing business On the other hand, T-Mobile’s trade-in program was aimed at limiting customer churn rate.
Recently, BlackBerry announced its plans to launch budget-friendly full-touch Z3 smartphone in April, this year. The BB10-based smartphone is the first product of the BlackBerry and Foxconn partnership. The 3G device will initially be introduced in Indonesia and will later be launched in other countries, integrated with 4GLTE technology.
In the third quarter of fiscal 2014, BlackBerry sold 4.3 million smartphones as against Samsung and Apple’s 83 million and 50 million smartphones, respectively. At present, the company is writing down its unsold inventories and has incurred an operating loss of nearly $5 billion.
BlackBerry currently has a Zacks Rank #3 (Hold).