A fair few different things.

It needs a pricecut. When you look at it next to the 3DS, it looks really expensive for what games are available. In December, in Japan, you could get a 3DS with Mario 3D and Monster Hunter for less than a Vita. Was a no brainer for anyone in the general public.

It needs Japanese support. The PSP and DS thrived because of great JP support, in all kinds of genre. It needs those smaller niche games to go alongside the giants that SE and Crapcom pump out. Western development has never really been big on handhelds, aside from the GTA games... Which brings me to my next point.

It needs follow ups to the games that made the PSP a success. It needs GTA, Final Fantasy, Gran Turismo. It needs God of War and Ratchet & Clank. Most of all, it needs Monster Hunter.

With all these games and a pricecut, Vita would fly off the shelves. Add in a few new colours, especially the white Vita and it would be competing with 3DS. A few smaller things would be cheaper memory cards (?) and actually having good prices for games on PS Store.

Based on E3 alone, Sony is more focused on PS3 and doesn't care much for Vita. Maybe, that's the problem?

Let's face it. Japan is lost for the Vita, at least for the next 18 months.

So I'll focus on the West:

-Scrap memory cards; put 16GB inbuilt memory in the console
-Pay big devs (Ubisoft, EA, Activision) bug bucks in order to get exclusive games in their big franchises.
-Pump out a new Ratchet and Clank game, Gran Turismo game; exclusive.
-Get rid of the rear touchscreen, to drop the price of the system by $50, at least.
-Create portable games, rather than port-able games from the PS3. People want to play games in a short burst on portable consoles FTMP, so why does it take 5 minutes to boot up from standby?
-Advertise people!

The Vita has a lot of things going against it. Let's hope they fix it.

Wah? It boots up in like a second. The rear touchpad can't be more than $10, and it has it's uses. Some games take good advantage of it like FIFA and Escape plan, in fact Escape Plan almost needs it. There are plenty of game that can be played in short burts, and seem to be made for it, Escape Plan and Motorstorm RC for example.

Monster Hunter will make the vita explode in Japan, Sony already has several big publishers making exclusive games for vita (e.gBioshock, AssC, CoD), if they're gonna buy exclusivity it should be a MH game.

The Vita needs two things, and everybody knows that.
1.) Price Bundle
2.) Titles
3.) The help of god
well actually three things

It may boot up in a few seconds, but to actually start playing a game it doesn't.

And MH won't help Japan, because it's on the 3DS. I don't see a MH  for Vita in Japan for a good 2 years at this rate.

ANY Monster Hunter. Nintendo won't have bought MH4, get MH3G exclusive only to let Sony get an exclusive in the same year. IF it gets anything, it'll get MH4U, or something like that. In which case, it'll probably be released late 2014, too late to make a huge impact.

Perhaps 5 minutes is an exagguration, but it certainly feels too slow...

The fact that Monster Hunter will be on 3DS first totally deludes any subsequent exclusive Monster Hunter game released for the Vita. It would certainly improve Vita sales but it wouldn't really help it in the race against the 3DS at all.

This is a really tough question. Not because we don't know the answers, because we do. It's just the most plausible solutions aren't practical (i.e. price cut) or are a long ways away (i.e. an exclusive MH [if it even happens] and system selling games).

Doesn't Playstation Mobile add Playstation content to Android devices?
I was suggesting they somehow allow access to Android apps on the VITA. It's a shame they can't do that though.