Lenovo mobile business profitable thanks to Motorola
Lenovo has some good news for its shareholders. The company’s mobile phone division is finally profitable, thanks to its acquisition of Motorola. Lenovo has achieved its target of return to profitability within 4-6 quarters of the Motorola acquisition.
Lenovo has a lot of interests in the consumer electronics space. The company’s strong fundamentals and timely acquisitions have made sure it remains profitable in a stagnating/declining PC industry. The cutthroat competition in the smartphone industry has left the company slightly wounded, with an 8% decline in the total sales of phones over the last year.
However, the Motorola acquisition has begun reaping dividends for the company’s bottomline. Motorola’s sales were up 25% last quarter. The PC business remained strong despite heavy declines in the sales numbers. With almost every company in the PC and Phones business witnessing falls in the sales numbers, Lenovo managed to increase its PC marketshare to 21.6%, largely thanks to its domination in the huge Chinese market.
Cost cutting will still be on Lenovo’s agenda this year, with the company hoping to achieve a reduction of $1.5 in costs for the year.
