Fairfax to rescue BlackBerry, eh? - Macleans.ca

Fairfax to rescue BlackBerry, eh?

Insurance company buys risk-averse technology giant — how very Canadian

by

Lefteris Pitarakis/AP

So this is how it ends for the increasingly irrelevant BlackBerry—bought out by an insurance company. How quintessentially Canadian is that?

If Fairfax Financial goes ahead with its $4.7-billion plan to buy the smartphone pioneer, it would be free to retool its broken business model beyond the glare of the public spotlight. Whether it will make any difference is another question entirely.

The tale of BlackBerry’s fall from tech stardom is well known: Apple unveiled its iPhone in 2007, but Research In Motion, as it was then called, failed to respond until it was too late. The misstep was due to a combination of arrogance, strategic miscalculation and the inability to make the tough decisions necessary to stay competitive on the world stage—another unfortunate Canadian trait. Last year’s decision to replace BlackBerry’s underperforming co-CEOs, Mike Lazaridis and Jim Balsillie, was a prime example of not wanting to rock a badly listing ship. Instead of finding a fresh face with a bold new approach, the board took the half-step of tapping Thorsten Heins, a company insider. BlackBerry experienced a half-turnaround as a result. Heins delivered a new operating system, but failed to whip up consumer excitement, culminating in last week’s $1-billion writedown of unsold phones and plans for 4,500 more job cuts.

If Prem Watsa, the CEO of Fairfax and a noted contrarian investor, is serious about fixing BlackBerry, and not just breaking it up and selling it off, he will need a radical plan that’s so far eluded other potential buyers, from Microsoft to Lenovo. He must also re- energize BlackBerry’s beleaguered brand. Stolid and risk-averse is fine for the insurance business. But it’s the kiss of death in mobile communications.