These are stories Report on Business is following Thursday, Feb. 20, 2014.
A spat between BlackBerry Ltd. and T-Mobile US Inc. is escalating into all-out war.
The battle, which is playing out in corporate blogs and across social media, highlights the aggressive stance by BlackBerry’s new chief executive officer and the spunky nature of his T-Mobile counterpart.
It also underscores the attempt by BlackBerry’s John Chen to turn the company around.
This all began when T-Mobile, which calls itself the “Un-carrier,” launched a promotion encouraging some BlackBerry users to switch to Apple Inc.’s iPhone 5.
That sparked a backlash among loyal BlackBerry troops.
It also prompted a furious Mr. Chen to lash out on the BlackBerry blog, accusing T-Mobile of a dirty deed, expressing his outrage and reminding the U.S. carrier that “our long-standing partnership was once productive and profitable for BlackBerry and T-Mobile.”
T-Mobile, in turn, promised to make good, expressing its delight at being a “BlackBerry partner” and apologizing to customers for “any confusion.”
Yesterday, T-Mobile went further, expressing its love for its BlackBerry customers. For Mr. Chen, not so much.
“Wow. Mind blown,” wrote T-Mobile’s chief marketing officer Mike Sievert.
“The passion we’ve seen from the BlackBerry Loyal over the past couple days has been pretty amazing. I want you to know we’ve heard you.”
And thus began a new promotion, with T-Mobile offering a $200 (U.S.) credit to BlackBerry users who want to swap for a different model, be it a BlackBerry or something else.
Add to that $50 for a new BlackBerry 10 model, and you’ve got a $250 deal.
Mr. Sievert was not so kind to Mr. Chen.
“Yesterday BlackBerry CEO John Chen posted a blog criticizing T-Mobile’s marketing to BlackBerry users,” he wrote.
“The premise of his article was that it’s best for customers if we restrict the free flow of information and limit consumer choice. At T-Mobile we totally reject that premise.”
T-Mobile CEO John Legere went further, needling his counterpart on Twitter. Here are a series of Mr. Legere’s tweets beginning yesterday afternoon:
“I was going to reply to #JohnChen but I don’t think they let him use @twitter”
“Heard from our #BlackBerry customers & John Chen (via his blog) that you didn’t like our marketing mail. Trust me I will reply, to customers”
“I love BB users and support them and give them choice … I am consistent. Even when wrongly called out on a blog!”
“@dodgerslogedude @BlackBerry or BlackBerry Corporate can’t answer call as it is busy blogging”
“If you want to stay on #blackberry, our offer is the best out there. Feel free to call me next time, Chen!;)”
And the “ouch” tweet: “Was going to engage John Chen on Twitter, but turns out he’s not here. I’ll check MySpace. Don’t worry @BlackBerry Something in the works!”
- BlackBerry 'outraged' after T-Mobile tries to lure customers to iPhone
- John Chen: 'I thought the world would be better off with a strong BlackBerry'
What’s BBM worth?
BlackBerry shares climbed today in the wake of Facebook Inc.’s blockbuster deal for WhatsApp, a highly popular mobile messaging company.
Facebook unveiled the $19-billion (U.S.) deal late yesterday, giving a boost not only to WhatsApp, which boasts about 500 million users, but also to BlackBerry, which also offers a popular messaging app, BBM.
As The Globe and Mail’s Omar El Akkad reports, the deal puts an apparent rich valuation on such apps.
By some accounts, BBM could be worth almost $3.5-billion, or much, much less.
The Financial Times today reports on the calculations of Wells Fargo analysts, who say it could be valued at $3.4-billion or as little as $700-million, based on the $42 per user Facebook is paying or the $8.50 Rakuten paid for Viber last week.
Warm and fuzzy in London
The assistant editor of the Financial Times is mighty keen on Mark Carney and all things Canadian.
In a column today, Mr. Jenkins, who’s also the newspaper’s financial editor, writes of how the “Carney effect” has become “almost trite” in London and how each indicator of an economic rebound “has generally been seen as proof of the mood change that accompanied the arrival of the Bank of England’s governor in July last year.”
But in the piece – “A breath of Canadian air freshens fusty Britain” – Mr. Jenkins goes far further.
Canadian businesses are doing well in Britain, he notes, citing a huge contract by Bombardier Inc. and how well Royal Bank of Canada and CanaccordGenuity are doing.
“Talk to Canadian businesses and there is a sense that they, too, are prospering – and some are convinced their fortunes have been helped by the presence of a compatriot at the helm of Britain’s central bank,” Mr. Jenkins writes.
At the same time, major players such as the Canadian Pension Plan Investment Board, Alberta Investment Management Corp. and the Ontario Teachers’ Pension Plan have been making waves, with deals and office openings.
And, of course, Canadian Moya Greene heads the Royal Mail and has had a positive effect.
“The Canadian feel-good effect that seems to have washed into Britain in Mr. Carney’s wake might sound unimportant,” Mr. Jenkins writes.
“Having a non-Briton as head of the BoE has not only helped dispel some of the central bank’s fustiness; it has also clearly accentuated the increasing openness of the British economy. It is a model that could be adopted by some more insular economies to good effect.”
Gap hikes hourly pay
Gap Inc. has set the bar higher amid the heated debate in the United States over minimum wages.
Chief executive officer Glenn Murphy announced late yesterday that the U.S. retailer is boosting its minimum hourly pay for its American employees to $9 this year and $10 next, which will affect some 65,000 workers.
“To us, this is not a political issue,” Mr. Murphy said.
“Our decision to invest in frontline employees will directly support our business, and is one that we expect to deliver a return many times over.”
What’s not a political issue for Mr. Murphy is certainly still one for U.S. President Barack Obama, who welcomed the news amid his minimum wage campaign.
- Gap to raise hourly pay, Wal-Mart remains 'neutral'
- Kevin Carmichael in ROB Insight (for subscribers): Minimum wage hike a job-killer: U.S. budget office
Tims hikes dividend
Tim Hortons Inc. boosted its dividend by 23 per cent and posted higher sales, but managed to squeeze out only a tiny rise in net profit in the fourth quarter, The Globe and Mail's Eric Atkins reports.
The coffee and doughnut chain posted a profit of $100.6-million or 69 cents a share, up just 0.3 per cent from the year-earlier quarter. Analysts had been expecting per-share profit of 76 cents. Revenue rose 10 per cent to $898-million for the three months ending Dec. 31.
Same-store sales, a closely watched measure of the performance of shops that have been open at least a year, rose by 1.6 per cent in Canada and 3.1 per cent in the United States.
Rogers has prime block, analysts say
Rogers Communications Inc. paid a big price to win a prime block in the wireless spectrum auction while Quebecor Inc. did not overpay for its position and has several options for what to do with its prize, analysts say.
Toronto-based Rogers may have won the most coveted spectrum position in the auction - which netted a whopping $5.3-billion for the federal government - but it paid much more than its rivals and its debt leverage will increase, said Barclays Capital analyst Phillip Huang.
The $3.3-billion it is paying is three times the consensus estimate of $700-million-to-$1-billion, he said.
- Bertrand Marotte: Rogers emerges with prime block in spectrum auction, but at a price: analysts
- Steven Chase, Rita Trichur and Sophie Cousineau: Frenzied auction raises stakes in Canada's wireless war
Streetwise (for subscribers)
ROB Insight (for subscribers)
- U.S. inflation edges higher, easing Fed concerns over falling prices
- Loblaw sees no letup in 'extreme' competition in first half
- Wal-Mart outlook disappoints as profit drops 21 per cent
- Record Japan trade deficit highlights risk of economic stumble