Prem Watsa, chairman and CEO of Fairfax Financial Holdings Ltd (PINK:FRFHF) (TSE:FFH) and one of the largest shareholders of Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) with 9.9 percent stake, said the Canadian smartphone manufacturer is starting to turn around. He believed that the fair value of the stock is around $40.

Prem Watsa Fairfax Annual Meeting Meeting 2013 Notes

Watsa discussed his views about Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) with Wilson Wang of Seeking Alpha during the shareholders meeting of Fairfax Financial Holdings Ltd (PINK:FRFHF) (TSE:FFH).

During their conversation Watsa said, “The turnaround story won’t happen overnight, and it’s only just getting started…We think the fair value is around 40 something and the time horizon is long-term as always, but we feel very confident in the management team.”

Watsa explained that Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB)’s Blackberry Z10 is unbelievably popular and it is attracting about 30 percent to 40 percent of other smartphone users. According to him, there are only 1 billion smartphones out of the 6 billion phones around the world. He said, “People are estimating smartphone shipments of 1.6 billion in 2016. If BlackBerry is able to maintain a 5 percent market share, then you have to roughly sell 80 million smartphones. They shipped 6 million last quarter, 1 million new phones and they are already profitable.”

Watsa also stated that the competition within the smartphone industry will continue to be strong going forward saying the major players such as Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG), but he is confident that Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) has its own market.

“BlackBerry has the security like no other. You can’t get the kind of security you want on an iPhone. But we think BlackBerry has its place in the market,” Watsa emphasized.

Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) recently received another big order for its Blackberry 10. The Canadian Tire Corporation Limited (TSE:CTC.A) (TSE:CTC) confirmed on Friday that its corporate team and employees from its subsidiaries, use Blackberry smartphones as their primary business device by the end of April. This only proves that the Canadian smartphone manufacturer has its own market.

When asked about the departure of Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB)’s founder, Mike Lazaridis from the board, Watsa expressed that the company is in great hands under its current CEO. According to him, Thorstein Heinz did an “amazing job in turning around the company.” He added, “We think that Mike left the company because he knew that he left it in good hands, and that the team Thorsten has hired will help the turnaround effort.” According to him, Lazaridis will not sell his shares and will continue to support Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB).