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Lenovo Thinks It Can Achieve Mobile Success Strategy

Lenovo Thinks It Can Achieve Mobile Success Strategy
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Lenovo posted its first quarterly net lost in six terms as its more profitable division of PCs lost market share to HP and Dell and their mobile division struggled with material cost increases and aggressive pricing by competitors.

In the period ended in June, Lenovo’s net loss was $72 million against the analysts’ projection of a $32.9 million net income. In the statement of its quarterly announcement, the Beijing-based company noted its revenue was $10 billion compared with projections of $9.9 billion.

The PC business drove revenue with a total $7 billion sales. Still, the PC segment sought a media inflation of 8 percent that will persist into the final months of the year, according to Gianfranco Lanci, Lenovo’s COO.

This could impact Lenovo further as they most likely will not pass the increase in costs to the consumer price. “We definitely have to consume the cost increase if we want to keep the decent profitability. It must be reflected into our selling price,” said Lenovo’s CEO Yang Yuanqing in an interview for Bloomberg.

With more than 11 million mobile phones put on the market by its Mobile Business Group, Lenovo is optimistic about its perspective for 2018. Since the beginning of the year the Chinese company has sought growth of two digits in their mobile business both with Motorola and Lenovo branded phones, mainly out of China. That represents a mild rise of 2.3 percent to $1.75 billion in sales.

Lenovo is expecting to achieve its turnaround goals “in the second half of fiscal year 2018,” as Chairman and CEO Yang Yuanqing told Reuters.


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Marco Islas
Marco Islas
Journalist with 15 years of experience covering the verge between culture, tech and business lives in the Mexico Silicon Valley witnessing his bloom.

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