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Fairfax Financial CEO Prem Watsa has a comprehensive plan for BlackBerry Ltd.'s future – there's no way he could line up even tentative financing if he didn't. Maddeningly, he hasn't told us what it is yet.

No matter. There appears to be only two options, which are diametrically opposed: either revive the handset business or shut it down and become a pure network services company.

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BlackBerry's most recent results were, of course, horrendous, but the company still managed to generate $290-million in free cash flow. This is a key stat – in one terrible quarter, the company generated enough free cash to almost pay a year's worth of interest on the expected $3-billion in financing that will be needed to complete a takeout deal.

The other interesting thing about the most recent results is the near 50/50 split between handset sales and revenue from network services (fees to use BlackBerry's proprietary, secure network). The company's future could emphasize either business division from this point.

Reviving the handset business would be problematic to say the least, as the global smartphone market reaches saturation. Citigroup research (courtesy of CNBC) writes that "demand growth for high-end smartphones is noticeably decelerating as global saturation is achieved and hardware innovation is increasingly elusive."

Dominant industry players Apple and Samsung are having trouble maintaining sales growth. BlackBerry, with a somewhat tarnished brand and smaller ecosystem (fewer apps, no iTunes, etc.), will have a difficult time increasing sales from current levels after the Z10 and Q10 disappointments.

Shutting down the handset business and attempting to find growth through the network business is the more likely path to success. The security of the BlackBerry network is the company's one undeniable competitive advantage. There are very bullish projections – from Scotia analyst Gus Papageorgiou in particular – surrounding growth possibilities for the network in industrial sectors like automotive and health care.

But this strategy is not without its own difficulties. At this point, the vast majority of network revenues are tied to BlackBerry devices. As BlackBerry handsets fade into history, the network will have to support more and more Apple and Android smartphones to replace existing revenue. However, there are already competitors in the multi-platform security space, such as MobileIron, Good Technology and Citrix. BlackBerry will also have to convince global telecom providers to switch to their network. This may not be easy even with the added security.

BlackBerry is a fascinating, high-profile, high-stakes corporate strategy case study. The main decision is whether to jettison the iconic devices that transformed the company into a $30-billion global behemoth by early 2007.

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Scott Barlow is a contributor to ROB Insight, the business commentary service available to Globe Unlimited subscribers. Click here to read more of his Insights , and follow Scott on Twitter at @SBarlow_ROB .

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