Lenovo Group Ltd (聯想) said that it expects its loss-making smartphone business to turn a corner next fiscal year as it shifts toward higher-end devices and ramps up marketing in the US and China.
The world’s largest PC maker is counting on a revival of the Motorola smartphone business it bought for US$2.8 billion to make up for a declining computer industry.
The Chinese company said that premium gadgets — such as an upcoming smartphone with augmented-reality capabilities — should help stabilize the division in the second half of this year and revive its faltering consumer business.
“I hope we can completely turn around the business in the next fiscal year,” chief executive officer Yang Yuanqing (楊元慶) told analysts on a call.
He stopped short of saying the unit would make a profit — a target that has consistently eluded Lenovo since its 2014 acquisition of the US name.
“Integrating the mobile business needs time; it took several years for us to integrate the PC business” after acquiring it from IBM, he told Bloomberg News before the call. “But writing down Motorola is never an option.”
In the interim, Lenovo has slowly relinquished smartphone market share in its home market to aggressive rivals from Huawei Technologies Inc (華為), Oppo Mobile Telecommunications Corp (歐珀移動) and Vivo Communication Technology Co Ltd (維沃移動通信).
It is now willing to spend “heavily” on advertising and marketing to try and fulfill an ambition of becoming a top-three player in global smartphones, Yang said without specifying a timeframe.
Lenovo posted a first-quarter profit that exceeded estimates, but that came mainly on the back of cost cuts and asset sales, which helped to make up for sluggish demand for smartphones and PCs. Net income rose 64 percent to US$173 million in the period ended June, while sales fell 6.2 percent to US$10.06 billion.
Shares of Lenovo rose as much as 5.2 percent in Hong Kong, on track for their highest level in more than three months. The stock is down about 30 percent this year.
The company had embarked on a plan to cut US$1.35 billion from annual costs and eliminate 3,200 jobs, an effort that is now showing up in quarterly results. The challenge now will be to expand internationally, while investing in key technology such as cloud computing, “artificial intelligence,” robotics and Internet services, the company said.
While Lenovo introduced new Motorola handsets, it sold 31 percent fewer units in the latest quarter. Total PC shipments declined 2 percent. Many of the efficiencies came out of Lenovo’s American division, the company said.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last