Lenovo reports massive quarterly revenue drop, as Motorola integration fails
Back in October 2014, when it closed the $2.9 billion acquisition of Motorola Mobility, many felt the world’s largest PC manufacturer hit the jackpot. After all, smartphone demand was still thriving everywhere from developed to emerging markets, and on the heels of a deep identity crisis as Razr feature phones became obsolete, the Moto brand got a breath of fresh air during a short period of Google oversight.
Only Lenovo failed to capitalize on the apparent popularity of near-stock Android-running Moto Xs and Gs among power users and software purists, undergoing several restructuring actions but finally admitting in its latest financial report that “integration efforts did not meet expectations.”
Motorola contributed less than 5 million units between January and March to its parent company’s smartphone total of almost 11 mil globally, with product transition in North America deemed “not successful”, and overall China shipments declining a staggering 85 percent as the business “shifted focus to open market and higher price bands.”
Nonetheless, Lenovo insists it “has learned a great deal since the close of the Motorola acquisition and is applying learnings quickly, with actions in organization, leadership and approach” to avoid losing more money after seeing its full-year revenue take a 3 percent hit, and quarterly earnings drop 19 percent year-on-year.
The Mobile Business Group, which includes both Motorola and Lenovo-branded phones, as well as Android tablets and smart TVs, generated quarterly sales of $1.7 billion, and a grand total of 66.1 million handheld shipments in the past 12 months.
Tablets somehow managed to “outpace the market”, and smartphones saw “robust growth” outside China, but without stability in the world’s largest handheld market, Lenovo can’t please its investors. Leave it to ZUK to rebuild “end-to-end competitiveness” domestically, and a separate “competitive product portfolio”, no doubt headlined by the upcoming Moto Z, to “get the US business back on track.”
Source: Lenovo Newsroom