How BlackBerry and Watsa Can Win With John Chen

BlackBerry’s future suddenly looks a lot brighter. Media reports confirm Prem Watsa’s $4.7 billion bid to take BlackBerry private has collapsed, failed, been abandoned, and is now dead. What’s fascinating is the deal that BlackBerry’s largest investor announced Sunday instead. Watsa’s company, Fairfax Financial Holdings, has put together a $1 billion private placement—accounting for one-quarter of the total—that gives the smartphone maker a shot at relevance and real profitability.

The key is how BlackBerry’s interim Chief Executive Officer John Chen handles customer relationships and costs while transitioning out of the hardware business. Chen doesn’t know much about smartphones, and he doesn’t have to. The company’s competitive advantage is in its software, BlackBerry Enterprise Service 10 (BES 10), which continues to win new business even as the brand disintegrates before consumers. Spain’s NCG Banco and the Australian Transport Safety Bureau are the latest customers to adopt the technology, in part because it works on Android and iPhone devices. Ironically, it never worked on old BlackBerry devices, yet another squandered opportunity at the top.