Lenovo, the Chinese player, saw a fall in Q4 net income by 37% to $100 million, year-on-year, due to the major achievements of Motorola Mobility and IBM’s low-end server business.
“The integration of Motorola and System X [IBM business] are both on track, but it will take time before they become additional core businesses for Lenovo.”
Said Yang Yuanqing, Lenovo CEO, speaking on the company’s earnings conference call.
In terms of profitability, the CEO said that he intended “to turn Motorola around in four to six quarters after closing [October 2014]”.
A greater share of mobile sales in group revenue, and continued strong growth outside the China, clearly indicates the progress of Yuanqing’s “strategic direction”, which also includes becoming less dependent on PC sales all over the world.
Revenue for the 3 months ended on 31 March, 2015; which was up 21%, year-on-year, to $11.3 billion. Whereas PCs accounted for 63%, mobile 25%, and 9% from the other enterprise. If carefully observed, in the first quarter of last year PCs contributed 83% of sales.
According to IDC figures, Lenovo had a 5.6% share of the global smartphone market at the end of March, 2015 and a 5.4% share in the worldwide tablet market – performances that warranted third standing in each market sector.
Furthermore, Lenovo saw five times greater growth in smartphone outside China during the same period. More than half of Lenovo’s smartphone volume (56%) now comes from outside its local market.
The CEO, Yuanqing also added that:
“We are ready to transform ourselves from making mostly hardware to a combination of hardware and software services. This will spur a new wave of growth for Lenovo in the coming years.”
There is strife competition in the mobile industry as the main players like Apple, Samsung, Sony, HTC etc. are producing outstanding gadgets and making the market more tough and inexpensive as well.