China’s Lenovo Group has reported its first quarterly loss in the last six years, the reason for this being acquisition and restructuring costs. The company also also hurt be weak sales of personal computers (PCs) and smartphones.
Lenovo is the world’s biggest PC manufacturer and the company reported loss of $128 million for the period ended March 2016, compared to $829 million profit in the same period last year.
In the last six months to one year, the company has reduced its focus on PCs and has been trying to concentrate more on the smartphones and servers business. The company said that profit was pulled down by costs of multi-billion dollar acquisitions in 2014 — for the Motorola handset division of Google and low-end server arm of International Business Machines.
One of the biggest concern for Lenovo is to increase its presence in the smartphones business and this is hurting the company pretty hard. Moreover, competition is emerging markets like India and Brazil is also not helping Lenovo as they are trying to get a foothold in the ever growing smartphones business in both these countries.
In PCs — by far Lenovo’s largest business — shipments fell seven per cent in January-March 2016 versus 9.6 per cent in the broader industry, showed data from researcher Gartner.
By Atanu Kumar Das