It's no secret that BlackBerry Limited (NYSE:BB) is in desperate need of some good news. But shares 1.7% after the company posted quarterly results on Tuesday despite the communications software maker beating Wall Street expectations. All in all, a once smart-phone company is staying afloat due to its move into cybersecurity software and IoT products. Once a failing smartphone maker now seems like a mediocre software and cybersecurity company.

After it discontinued its first-party smartphone business half of a decade ago, BlackBerry aggressively expanded its enterprise software business, with its biggest acquisition being the cybersecurity firm it bought for Cylance for $1.4 billion at the beginning of 2019. In fiscal 2020 that ended on February 28^th that year, revenue rose 15% but most of that growth came from Cylance's integration, along with higher licensing revenue from the company's patent portfolio.

In fiscal 2021, BlackBerry's revenue declined 14% as the pandemic caused sluggish auto sales with the ongoing chip shortage and supply challenges only making the situation even worse. Its enterprise software and security business are also facing strong competitors such as Palo Alto Networks (NASDAQ:PANW) and CrowdStrike (NASDAQ:CRWD), both of which are growing much faster.

Blackberry's dependence on the auto industry for its long-term turnaround is a risky bet. There's also the fact that the ongoing chip shortage will go well into 2022. Along with the incentives for EV adoption, inflation and high gas prices are making gas-powered cars less attractive. Therefore, BlackBerry's recovery is hanging by a threat. Although its IVY platform seems promising, it cannot move the needle either for the company's revenue nor the QNX as it will be installed in a limited number of 2023 model vehicles next year, therefore it won't move the needle for QNX or BlackBerry's total revenue anytime soon while the company continues dealing with ongoing losses and declining gross margins.

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