Friday, August 14, 2015

Lenovo can sell PCs, but not phones

Even the world's no.1 PC maker finds selling smartphones tough

Lenovo is the biggest PC maker in the world, but smartphones remain a challenge. The company's mobile arm announced a pre-tax loss of $292 million for the three months ending in June: Motorola phones shipped stood at 5.9 million, down just less than a third from last year. The company now plans to cut 10 percent of its non-manufacturing jobs (roughly 3,200 people), aiming to save around $650 million in the second half of 2015. It's also writing down $300 million in unsold phones. The company's total net profit dropped 51 percent year-on-year, down to $105 million.

Lenovo's chief exec, Yang Yuanqing, told Reuters that he stands by the acquisition of Motorola, which cost $2.91 billion in 2014. He added that restructuring Motorola and Lenovo's smartphone divisions will take two to three quarters. This looks likely to cost $600 million, due to the "toughest market environment in recent years" -- likely why the company is trying all sorts of gambits.

Source: Engadget

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