BlackBerry's (BB -1.79%) brand was once synonymous with smartphones, but its heyday ended after iPhones and Android devices split the market. By the time John Chen took over as CEO in 2013, the Canadian tech company had become a desiccated husk of its former self.

Instead of trying to revive the BlackBerry's dying smartphone business, Chen phased out the unit and licensed its brand to third-party smartphone makers. Chen then leveraged BlackBerry's reputation in enterprise security to expand its software and services segments.

That turnaround, which was buoyed by big investments and acquisitions, was a grueling process. But BlackBerry's annual revenue growth finally turned positive again in fiscal 2020, which ended last February. Its shares also briefly hit a nine-year high of $25.10 this January amid the Reddit-fueled short squeezes, but those gains quickly evaporated.

BlackBerry's network operations center, a large room with employees sitting at computers and several large displays on the wall

Image source: BlackBerry.

Yet BlackBerry's stock price remains up about 50% over the past five years, which indicates Chen's aggressive turnaround strategies have stabilized the company. But will BlackBerry generate comparable returns over the next five years? Let's take a look at its core growth strategies to find out.

How does BlackBerry plan to keep growing?

BlackBerry splits itself into two main businesses. Its software and services segment, which generated roughly a third of its revenue in the first nine months of fiscal 2021, houses Spark, its unified suite of security software and services. Its Internet of Things (IoT) portfolio, which includes its automotive operating system QNX and secure communications services like AtHoc and SecuSUITE, generates another third of revenue.

An IT professional checks a tablet.

Image source: Getty Images.

Its licensing and other segment, which generated the remaining third of its revenue in the first nine months, mainly charges licensing fees on thousands of patents. It also earns licensing fees for discontinued brands that were licensed to other companies, including its eponymous smartphone division and the BBM (BlackBerry Messenger) Consumer app.

BlackBerry's revenue rose 15% in fiscal 2020, but most of that growth came from its acquisition of the cybersecurity firm Cylance, which was subsequently integrated into Spark. It also generated higher licensing revenue throughout the year.

However, analysts expect BlackBerry's revenue to decline 14% in fiscal 2021 as it laps the Cylance acquisition and struggles with the slower production of QNX-powered vehicles throughout the pandemic. But next year, they expect its revenue to rise 9% as the pandemic abates, auto sales recover, and demand for Spark's services warms up again.

But BlackBerry still has a lot to prove

BlackBerry recently revealed new or expanded partnerships with Amazon Web Services (AWS), Baidu, and several automakers to integrate QNX into their next-gen systems for connected and driverless cars. These partnerships will presumably strengthen BlackBerry's software and services segment, but I have two major concerns.

First, BlackBerry didn't disclose any financial details regarding these deals. Second, QNX is already the world's top embedded OS for vehicles, and it's unclear if these technological partnerships will merely help the business tread water as the automotive market evolves or actually boost its revenue per vehicle.

A woman reads while sitting in a driverless car.

Image source: Getty Images.

In fact, BlackBerry says the first vehicles powered by IVY, the automotive platform it's developing with AWS, won't start shipping until fiscal 2023. Therefore, BlackBerry's QNX business could certainly expand with the next-gen auto market over the next five years, but investors expecting a big boost in QNX's near-term revenue could be sorely disappointed.

Meanwhile, Spark could still struggle in the crowded cybersecurity space against entrenched players like Palo Alto Networks and disruptive cloud-based newcomers like CrowdStrike.

BlackBerry is also relying heavily on aggressive lawsuits to boost its patent licensing revenue. It reached a long-awaited settlement with Facebook over mobile messaging technologies in January, but it didn't disclose any figures from the deal. Its lawsuit against Snap over similar claims remains unresolved.

That same month, BlackBerry sold some of its older patents to the Chinese tech giant Huawei. It also recently secured a new smartphone licensing deal with the start-up Onward Mobility, with the help of Foxconn, to continue producing BlackBerry-branded phones after the expiration of a previous partnership with the Chinese phone maker TCL.

Those moves all indicate BlackBerry will continue to streamline and expand its licensing business, but its growing reputation as a "patent troll" could persist as it sues even more companies. The volatile expansion of this business might temporarily offset the slower growth of its software and services segment, but it's not a reliable growth engine yet.

Where will BlackBerry be in five years?

BlackBerry deserves credit for stabilizing its business before it plunged off a cliff, but investors shouldn't expect it to evolve into a high-growth tech company within the next five years.

Its software and services segment still faces tough challengers in the cybersecurity market, and its widely hyped automotive partnerships probably won't significantly move the needle. It can still squeeze out more revenue from its licensing business for now, but it could eventually run out of litigation targets as its third-party partners ditch its dying brands.

Based on these facts, I believe BlackBerry will underperform the S&P 500 over the next five years. It's not doomed yet, but its business is still built on hype and volatile moving pieces instead of a firm foundation.