Bbry Logo

Source: BlackBerry.

There was a time when BlackBerry (NASDAQ:BBRY) was synonymous with "smartphone." In the early days, the CrackBerry was the only platform that mattered. Palm Pilots were simple PDAs, the mobile Windows version could barely connect to the Internet, and the mobile giants we have today were occupied in totally different markets.

Times were good for BlackBerry. Share prices briefly spiked higher and the Canadian company's market cap crested higher than $83 billion. It was the most valuable company in Canada... before the fall.

You know the rest of the story. Android and iPhone burst onto the scene, ate BlackBerry's breakfast, lunch, and dinner, and left the Canadians begging for mercy.

The stock has plunged more than 95% lower during the past six years, with very few hopeful rest stops in between. The company was for sale, then sold, then off the market again. BlackBerry changed CEOs (twice!), and the board of directors is full of fresh faces, too.

The stage is set for a final act of tragedy -- or a triumphant turnaround. Here's what it would take to give BlackBerry a second wind, in three (not so) easy steps.

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It's time to stop making hardware like this BlackBerry Z3 handset, guys. No, really -- just stop. Image source: BlackBerry.

Step one: Let it go!
The old business model clearly doesn't work today. BlackBerry is no longer destined to hawk smartphones to corporate accounts, or consumers, or to developing nations in the third world. With a handful of exceptions, the brand name itself has become toxic. The only way forward starts with forgetting all of that.

Stop releasing BlackBerry-branded handsets. If possible, sell or spin off that division. It's time to separate this company from its storied-then-sullied past, like a molting lizard. If South Africa and Indonesia still want BlackBerry hardware with the familiar old brand, it's better to let someone else worry about this low-margin and ultimately limited business. 

Go ahead and sell the BlackBerry branding rights along with the hardware. Hire a big-name marketing firm, or start a public name search on social networks. And please, don't pick another fruit. What's left in the suburbs of Toronto is then ready for the next radical move.

Step two: Pick your poison
This is the easy part: Select a new line of business. Plant a tabula rasa in the middle of a new industry, preferably one where early adopters are still looking for first-mover leaders. One where there's lots of room to grow, and where the signature brands of tomorrow are still being defined.

It's easy, because BlackBerry has already started doing exactly this. Two weeks ago, BlackBerry announced Project Ion. That's an umbrella name for a bundle of new ideas, all aimed at facilitating the Internet of Things, or IoT.

Some insiders have pegged the economic value of this market at $14 trillion or more. That's not an annual revenue opportunity, but the total economic value of connecting machines directly to other machines, spread out over the next decade or so. Even so, it's a staggeringly huge market, and grabbing even a tiny slice of it in these early days could set you up for decades of massive sales, profits -- and stock market gains.

This Project Ion idea is timely indeed. BlackBerry wants to set up a backplane where IoT data can move where it's needed and, of course, under the auspices of BlackBerry's established security expertise.

The old BlackBerry might have run out there with a handful of hardware devices in hand, ready to start collecting data. But there are plenty of companies exploring that side of the market already. Instead, this project is mostly a cloud-based software solution that attempts to build an ecosystem behind the scenes. The ideal end product is a friction-free and secure connection hub where IoT devices can meet up, exchange data across multiple sources, and send reports back to defined endpoints.

There might be a place for BlackBerry in this world, if the company can only define its niche tightly enough. Project Ion will never be all things to all IoT users; but, like I said, a small sliver is enough to get rich in this booming market.

Step three: Stay focused
Whether BlackBerry selected Project Ion as its Step 2 focus, or went down a different path, this is where the company should double down on whatever its new focus is. This will be much harder than it sounds. Distractions will come along. Seemingly ripe opportunities might dangle just out of reach, tempting John Chen to stretch for them. But he can't afford to do that.

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BlackBerry CEO John Chen is in for a rough ride. Source: BlackBerry.

For the first several years of this refreshed, re-branded BlackBerry's existence, it's all about becoming great at that single point of focus -- whatever that focus might be. Any distractions from this single-minded pursuit of excellence will only undermine the core of the redesigned company. BlackBerry doesn't have the resources to branch in a dozen different directions, and won't for the foreseeable future.

Times may be tough, and there's no guarantee that the chosen business model will succeed. Temptations to deviate from the new focus will be plentiful. But it's BlackBerry's best shot at staying relevant, or even staying alive.

John Chen could end up leading a totally new mainstream brand for the ages -- or a shattered wreck for the history books. The only way to find out which one is to give it more than the "old college try."

Pick your guns and stick to them, Mr. Chen. And I wish you the best of luck with these three steps.

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Anders Bylund has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days.

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