BlackBerry Seeks to Reassure Customers With Newspaper Ads

BlackBerry Ltd. (BB) is taking out full-page ads in newspapers worldwide in a bid to convince carriers, consumers and partners that they shouldn’t abandon the struggling smartphone maker.

“These are no doubt challenging times for us and we don’t underestimate the situation or ignore the challenges,” the Waterloo, Ontario-based company says in the ads, which take the form of an open letter. “We are making the difficult changes necessary to strengthen BlackBerry.”

The ads are an attempt to communicate directly with customers, without intermediaries or distortion, said Chief Marketing Officer Frank Boulben. BlackBerry wants to assure buyers that they can choose one of its smartphones with confidence, knowing that the company will stick around.

“The level of noise around the company is very high,” Boulben said yesterday in an interview. The ads will appear today in 30 publications in nine countries, including the Wall Street Journal and Washington Post. BlackBerry also is sending the letter to customers and partners.

The ad campaign follows a tumultuous year for BlackBerry, which has struggled to reverse its fortunes following years of losing market share to Apple Inc.’s iPhone and Google Inc.’s Android. After tepid sales of the new BlackBerry 10 lineup, management announced a tentative $4.7 billion buyout agreement last month that would take the company private.

Photographer: Simon Dawson/Bloomberg

BlackBerry smartphones in London. Close

BlackBerry smartphones in London.

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Photographer: Simon Dawson/Bloomberg

BlackBerry smartphones in London.

Sales Plunge

Slow sales of new models such as the Z10 led to a 45 percent revenue decline last quarter and prompted a $934 million inventory writedown. The turmoil also has weakened ties with long-time customers and partners. T-Mobile US Inc. (TMUS), the fourth-largest U.S. carrier, said last month it will begin removing BlackBerry inventory from its stores, forcing buyers to have the phones shipped to them.

Some of the world’s biggest banks -- including Morgan Stanley (MS) and UBS AG (UBSN) -- are holding off on a switch to BlackBerry 10, while Credit Suisse Group AG has decided not to upgrade at all. Jabil Circuit Inc. (JBL), an electronics supplier to BlackBerry, said last month it will probably disengage from its relationship with the company in coming months. That’s raised speculation that BlackBerry will stop making phones altogether.

Fairfax Financial Holdings Ltd., the Toronto firm leading the buyout of BlackBerry, hasn’t announced its financing plan for the deal, raising investor concern that the transaction won’t happen. The shares closed at $8.14 yesterday in New York, below Fairfax’s $9-a-share offer. BlackBerry co-founder Mike Lazaridis, meanwhile, is considering his own takeover proposal.

Super Bowl

Previous advertising efforts have failed to resurrect BlackBerry’s stature among smartphone buyers. The unveiling of the BlackBerry 10 phones earlier this year was supported by the biggest marketing campaign in the company’s history. BlackBerry even splurged on a Super Bowl ad in early February, and named R&B superstar Alicia Keys as its global creative director.

With the latest campaign, BlackBerry is turning to an older form of marketing -- newspapers -- to call out its technological prowess. BlackBerry sees the print ads as the best way to set the record straight, Boulben said.

The ads emphasize that the company has plenty of cash on hand and no debt. BlackBerry also is touting the planned debut of its BBM messaging software to the iPhone and Android devices. About 6 million customers have already preregistered to be notified about the rollout, according to the ads.

“We communicate with our customers face to face through our direct sales force, but we cannot reach everyone within a company or an administration,” Boulben said. “We thought this was a very good way to get our message across.”

To contact the reporters on this story: Patricia Laya in New York at playa2@bloomberg.net; Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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