Lenovo announced their third quarter financial results revealing they had returned to profitability for their smartphone division consistent with a commitment made after acquiring Motorola. In addition, Lenovo also revealed what their branding strategy would be for the Moto line of devices after it was recently revealed they would be dropping Motorola branding.
When Lenovo acquired Motorola, they indicated they had plans to achieve at least a breakeven status for their Mobile Business Group within four to six quarters. Lenovo combined restructuring efforts with strong performance in markets outside of China, notably emerging markets in India and Indonesia, to achieve a pre-tax loss for the business unit of only $30 million USD, which was a loss margin of only 0.9 percent.
Lenovo indicated smartphone volume declined to 20.2 million units for the third quarter, down 18.1 percent compared to the same quarter a year earlier. However, sales outside of China increased by 15 percent year-over-year driven by sales increases of 206 percent and 318 percent in India and Indonesia respectively. Lenovo says the share of sales volume outside of China increased to 83 percent during the third quarter.
Looking forward, Lenovo says they will employ a new dual-brand strategy for their smartphone portfolio. The brands will include Lenovo Moto and Lenovo Vibe.
Outside of the smartphone business, Lenovo saw quarterly revenue fall to $12.9 billion USD, an eight percent decrease year-over-year while pre-tax income was $397 million USD. Net income was also up at $300 million USD. These results exceeded analyst's estimates. Lenovo noted that the company is dealing with issues like a general business slowdown as well as a decline in the PC market. Thanks to diversification into so many areas, Lenovo is weathering the situation.
source: Lenovo (BusinessWire)
