BlackBerry (NASDAQ:BBRY) recently announced the BlackBerry Passport Trade-Up program, which pays consumers up to $550 for trading in their old iPhones. Qualifying models include the iPhone 4S, 5, 5S, and 6. To get the maximum $550 value of the deal ($400 for the device and a $150 bonus), customers must trade in a 128GB iPhone 6.

To qualify, customers need to buy a BlackBerry Passport. If the trade-in is approved, a payment will be made via a Visa prepaid card. The promotion, which will run from Dec. 1 to Feb 13, applies only to Passports purchased in the U.S. or Canada or sold by Amazon.com. BlackBerry is currently advertising a black BlackBerry Passport for $599, down from its regular $699.

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BlackBerry's Passport. Source: BlackBerry.

BlackBerry's offer is notably higher than other trade-in programs for iPhones, but many Apple (NASDAQ:AAPL) loyalists will likely scoff at the offer. Apple has a great record of retaining its existing users. In July, Morgan Stanley's AlphaWise tracker found that a whopping 90% of iPhone users stick with Apple when upgrading their phones. BlackBerry users don't show that same degree of loyalty. That's why its global market share of smartphones plunged from 20% in late 2009 to less than 1% today, according to IDC and Gartner.

Why does BlackBerry still sell smartphones?
BlackBerry CEO John Chen previously stated that the company's three pillars of growth are BES (BlackBerry Enterprise Service), BBM (BlackBerry Messenger), and cheap phones for emerging markets.

At first glance, premium phones like the Passport don't fit anywhere in that strategy. But BlackBerry can't simply abandon smartphones, since its hardware (handset sales) and service (subscription) revenues accounted for 92% of its top line last quarter. However, during that quarter, BlackBerry's hardware and service revenues respectively fell 46% and 41% YOY. The BlackBerry Passport reportedly "sold out" of its 200,000 units at launch, but that figure pales in comparison to the 10 million iPhone 6s Apple says it sold during its launch weekend.

BES, which serves businesses, is part of BlackBerry's software division, which only accounted for $59 million, or 6.4% of its sales, last quarter. BlackBerry expects that segment to generate $250 million annually by the end of fiscal 2015, then double next year thanks to relaxed BYOD (bring your own device) policies at workplaces and rising demand for MDM (mobile device management) solutions. Active BBM users, which BlackBerry hopes to monetize with ads, rose 7% sequentially to 91 million users, but that user base remains dwarfed by WhatsApp's 600 million users.

Since BlackBerry's phone division is a deadweight on these other higher-growth divisions, it would make sense to split up or spin off its businesses. Chen discussed selling or spinning off BBM before, but a stand-alone mobile messaging app couldn't go toe-to-toe against giants like Facebook's WhatsApp, Tencent's WeChat, and Naver's LINE. BlackBerry has never seriously discussed spinning off or selling its smartphone division. This means that BlackBerry must periodically launch new smartphones to let its software and BBM businesses gradually offset those losses.

"Underdog" trade-in tactics rarely work
BlackBerry isn't the first underdog to offer cash trade-ins for competing products. Microsoft (NASDAQ:MSFT) is notorious for these kind of offers.

Last September, Microsoft offered $200 to customers trading in their iPhone 4S, iPhone 5, or iPad for Windows Phones. Between the third quarter of 2013 and the third quarter of 2014, Microsoft's global smartphone market share slipped from 4.1% to 3.3%, according to Strategy Analytics. This June, Microsoft offered up to $650 for people to trade in a MacBook Air for Surface Pro 3. Surface Pro 3 sales actually improved last quarter, but so did Mac sales.

The following month, Microsoft offered $100 off an Xbox One in exchange for Sony's (NYSE:SNE) PlayStation 3 or an older Xbox 360. To date, the Xbox One has sold around 8 million units compared to over 15 million PS4s, according to industry tracking site Vgchartz. Those promotions didn't persuade Apple and Sony customers to trade in their devices, but they received plenty of negative media coverage mocking the tactics as desperate.

BlackBerry is stuck in the same rut as Microsoft. Offering big trade-ins simply won't persuade consumers to trade in their sleek iPhones for the square Passport.

The road ahead
The key takeaway is that BlackBerry's Passport promotion isn't aimed at turning around its smartphone business. Instead, BlackBerry simply needs to sell enough phones to slow down its year-over-year hardware declines while proving that BES and BBM have long-term growth potential.

Looking ahead, investors should pay closer attention to BlackBerry's BES deal with Samsung (NASDAQOTH:SSNLF), which could pave the way for Samsung to buy BB10 licenses. Samsung was rumored to be interested in doing so two years ago, but the two companies both shot down those rumors. If Samsung licenses BB10, BlackBerry stands a much better chance at reclaiming a small share of smartphone operating systems worldwide.

Leo Sun owns shares of Apple and Facebook. The Motley Fool recommends Amazon.com, Apple, Facebook, and Visa. The Motley Fool owns shares of Amazon.com, Apple, Facebook, Microsoft, and Visa. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.