The long-ailing smartphone arm of Chinese language electronics-maker Lenovo Group Ltd. trimmed its losses by half, its interim third quarter results show, as its technique targeted on the home market and higher-end choices bears fruit.
Lenovo’s China area President Liu Jun stated in a monetary name Tuesday that the unit will deal with creating high-performance merchandise for enterprise and gaming within the China market. These extra premium segments of the nation’s market have grown as a part of a normal pattern of upgrading consumption within the East Asian nation, he added.
Losses from the corporate’s smartphone enterprise narrowed 56% within the third quarter to $22 million. This got here as Lenovo rolled out dearer handsets, with its telephone costs as a complete rising 10% from the previous quarter.
It launched a brand new model of its flagship Legion gaming smartphone this month, with handsets operating between 3,499 yuan ($524) and 5,999 yuan. And in September, it launched its first 5G-powered Motorola Razr smartphone with a versatile display for 12,499 yuan.
“We’ve got suffered rather a lot, as a result of blindly pursuing quantity places stress on profitability,” Lenovo Group CEO Yang Yuanqing stated on the decision. He stated he expects the brand new technique to assist the smartphone unit flip a revenue within the subsequent quarter.
Lenovo’s smartphone enterprise has not posted an annual revenue because it acquired Motorola from Google in 2014 for $2.9 billion, because it struggled to combine the U.S. firm’s property and operations into its personal enterprise.
The corporate then downscaled its enterprise within the sector and turned its focus to the North America and Latin America markets. It additionally resorted to a cost-cutting technique to prioritize its important PC enterprise.
Because the smartphone market contracted through the pandemic, and Lenovo confronted fierce competitors from lower-end producers comparable to Xiaomi and Oppo, its shipments dropped 4% to 10.2 million models within the third quarter, making it ninth amongst world smartphone makers, based on intelligence agency IDC.
The Hong Kong-listed firm had a 2.8% share of the worldwide smartphone market within the second quarter, based on information from analysis institute Canalys, barely decrease than final yr.
In a shiny spot, Lenovo’s PC and good system enterprise retook the worldwide No. 1 spot with a 24.3% market share within the third quarter, delivering almost 20 million PCs, based on Canalys.
Lenovo is aiming to ship a complete of 300 million PCs in 2020, which might signify 9% year-on-year development and exceed its earlier goal by 40 million. Nevertheless, Yang stated the corporate is going through a scarcity of elements as producers had been impacted by the pandemic.
Fueled by the sturdy efficiency of the PC sector as individuals worldwide continued to work and play at residence through the pandemic, Lenovo’s income surged 43% to $350 million on income of $14.52 billion, which was up 7%.
Contact reporter Anniek Bao (firstname.lastname@example.org) and editor Joshua Dummer (email@example.com)
Download our app to obtain breaking information alerts and skim the information on the go.
You have accessed an article obtainable solely to subscribers