Lenovo blames smartphones for its first loss in six years
Lenovo had a pleasant run of income because of its PC enterprise, however like many others, it is discovering smartphones to be a harder go. Because of costs associated to its Motorola acquisition and $300 million value of unsold telephones, the corporate incurred a hefty $714 million internet loss for the primary time in six years. PC gross sales did not truly assist a lot, with income in that division dropping 17 % over final yr (although nonetheless much less than its rivals). Regardless of all that, Lenovo stated general gross sales have been truly up over final yr to $12.2 billion, and added that the modifications it made will save $650 million this yr alone.
Sadly, most of these financial savings are because of layoffs, as Lenovo is slicing round three,200 jobs. The corporate lately stated that it is dealing with its “hardest market surroundings in recent times,” however continues to be assured that its $2.9 billion buy of Motorola will repay. As proof, it pointed to smartphone gross sales outdoors of China that jumped from 19 % to 70 % general. Complete cellular gross sales elevated eleven % over final yr to $2.7 billion, and Motorola is now chipping in just a little over half of that. Consequently, it believes it that its cellular group will cease the bleeding and present a revenue in as little as “one to 2 quarters” — a narrative we have heard earlier than.