Losses would have been worse had the company not made layoffs and organizational changes over the past year, Yang noted in comments about the earnings.
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As part of its strategy, Lenovo will be pushing high-end smartphones in the USA market. However, since Lenovo took over Motorola, the Chinese smartphone market has fallen off quite a bit and Lenovo said its efforts to bring its brand to North America has been “not successful”.
Yang said Lenovo needs to “invest on making our smartphone business competitive, build up the brand and expand our [distribution] channels”. The company shipped 12.1 million PCs in the quarter and said it will “attack new growth areas” such as gaming and “detachables” – the two-in-one hybrid PC devices that have provided a glimmer of light for PC makers.
Hong Kong: Chinese technology giant Lenovo said Thursday it posted a net loss a year ago, as its smartphones struggle to keep apace with Apple and Android rivals and as the market for personal computers fizzles.
In the U.S., Lenovo barely had presence in the smartphone market but through its acquisition of Motorola, it boosted its market share to 5.2% past year, according to market research firm International Data Corp.
“Otherwise, we would not have had the global footprint we see today”, he said. Revenue fell to $9.13 billion from $11.3 billion a year earlier, as sales fell across all regions. Lenovo Group (0992) reported a profit of US$180 million for the fourth quarter ended March 31, 2016, representing an increase of US$80 million, compared with the corresponding period of previous year.
For Q4, operating expenses fell 23 per cent year-on-year to $1.27bn, leaving operating profit at $248m compared to $127m.
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When it comes to quarterly or yearly results, it’s not always going to be plain sailing, but for Lenovo, a company that has experienced some impressive growth over the past few years, their latest results are not what they would have been expecting. The main takeaway from such a report however, is the fact that Lenovo openly describe their acquisition of Motorola as not meeting their expectations, citing the decline in shipments as proof.
