Lenovo strategy fails to bring growth in Q3 revenue and profit

Lenovo event in 2016
The latest strategies of Lenovo Group could not arrest the decline in the quarterly sales performance – in third fiscal quarter ended December 31, 2016 — of the Chinese devices and enterprise IT solutions provider.

Lenovo posted revenue of $12.2 billion (–6 percent) and net income of $98 million (–67 percent) in Q3 fiscal 017 – primarily due to challenges in its three main lines of business including data center, mobile devices, and PCs and smart devices.

“Our PC business remains strong, mobile business has made progress, and data center business now has a clear improvement plan in place. Though it takes time to build the competence in these new growth engines, we are confident to achieve breakeven and profitable growth in them,” said Yang Yuanqing, chairman and CEO of Lenovo.

Lenovo achieved $8.6 billion (+2 percent) revenue in PC and Smart Devices (PCSD) Business Group, which includes PCs and tablets.

Lenovo shipped 15.7 million (+2 percent) PCs worldwide helped by growth in North America, where it increased its shipments by 14 percent.

Lenovo remained the worldwide PC market leader with 22.4 percent market share with record-high market share in China, Europe/Middle East/Africa region and Latin America.

Lenovo achieved 10 percent growth in tablets sales. Lenovo achieved significant increase in sale of gaming PC (+71 percent), Chromebook (+76 percent) and detachables (+91 percent).

Lenovo generated revenue of $2.2 billion (–23 percent) from mobile business including its Motorola phone division. Lenovo shipped 15 million smartphones (+7 percent q-o-q). Lenovo achieved 20 percent increase in Moto-branded products. Moto G shipments rose 12 percent y-o-y, aided by 23 percent increase in Latin America. Lenovo achieved 9.9 percent market share in India, the world’s third-largest smartphone market.

Lenovo’s $1.1 billion revenue from Data Center Group, which includes servers, storage, software and services, fell 20 percent. Lenovo achieved quarter-to-quarter revenue growth of 27 percent in North America, 10 percent in Latin America, and 9 percent in Europe/Middle East/Africa region.

Lenovo focuses on the transformative actions to drive data center business, such as strengthening our sales teams, investing in the channel, revamping product lines, building brand strategy, and adding new partnerships.

Lenovo generated revenue of $3.5 billion (– percent) in China, $1.7 billion (–14 percent) in Asia Pacific, $3.4 billion (–2.7 percent) in Europe, Middle East and Africa and $3.6 billion (–8 percent) in the Americas.

Baburajan K
[email protected]