Lenovo planning to increase revenues by letting Motorola lead mobile business

| Updated: Saturday, October 24, 2015, 19:24 [IST]

Chinese Smartphone & PC maker, Lenovo announced their quarterly financial report today where they stated that their total revenue rose by 3% year-over-year to $10.7 billion for the Q2, 2015. That wasn't the case with their net income though as it declined by 51% to $105 million.

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Lenovo planning to increase revenues by letting Motorola lead mobile

The above mentioned figures stand for the company's entire business portfolio and doesn't stand entirely true for their ambitious mobile amd tablet divison. Slowing growth and increased competition has been hurting its results in the mobile sector.

The company's mobile business mainly rode on Motorola's revenues. Motorola's $1.2 billion in revenue contributed to more than half of the mobile group's $2.1 billion in revenue for the last quarter.This means 33% gain year-over-year. The company also reported a pre-tax loss of $292 million in the mobile sector.

In the past quarter Lenovo shipped 16.2 million smartphones, which is up by 2.3% from the number shipped during last year's second quarter. Despite the fact that 5.9 million of the handsets delivered had the Motorola branding, it is still a decline of 31% year-over year.

Lenovo says that it will now rely on Motorola to design, develop and manufacture Lenovo's smartphone products. In addition, the company sees Motorola and the Mobile Business Group returning to profitability in the next two to three quarters. In tablets though Lenovo saw shipments rise 3.8% to 2.5 million slates.

With 5.8% of the tablet market, Lenovo is number third globally after having managed to steal in some market shares from the other two companies behind it. The company even launched their new online only sub brand called ZUK a month back to tackle Chinese counterparts like Xiaomi, Honor etc. Their first device dubbed the ZUK Z1 was also officially unveiled a few months back.

Lenovo officially quoted, "There will be a more-simple, streamlined product portfolio, with fewer, more clearly-differentiated models. A faster, leaner business model will better leverage Lenovo's global sales force and accelerate the efficiency actions already underway in its global supply chain. MBG will continue to drive the overall mobile business, but will now rely on Motorola to design, develop and manufacture smartphone products."