Lenovo, the largest PC maker in the world by shipments, announced plans to restructure its business in China in a move to turn around weak sales across its major product lines.
Chairman Yang Yuanqing said in a Weibo post its China business will be reorganisd into two divisions – a consumer focused PC and smart devices unit, and a data centre group, CGTN reported.
Yang said global innovation is shifting to China, and: “to take advantage of new opportunities brought by changes in our industry, we are restructuring”.
Liu Jun, who led the vendor’s acquisition of Motorola Mobility from Google in 2014, will return to the company as president of Lenovo China to lead the consumer division.
The company said in February its combined Lenovo-Motorola business struggled for traction in the face of tough competition, particularly in its home market of China. It said China is “still in transition” and is focusing on product portfolio enhancements for that market.
Lenovo suffered a 67 per cent drop in net profit in the quarter to 31 December compared with the same quarter of 2015. Mobile sales fell 23.4 per cent to $2.19 billion during the quarter, with smartphone shipments dropping 25 per cent to 15 million units. The division reported a loss of $155 million compared with a prior-year loss of $47 million.
Its core PC business, which accounts for 70 per cent of revenue, saw a 2 per cent year-on-year sales increase to $8.6 billion in the October-December period. The data centre group’s quarterly sales declined 20 per cent year-on-year to $1.1 billion.