Lenovo said growth in its fiscal Q4 was fuelled in part by a good performance in its mobile business, but China remains a weak spot for the company’s smartphone activities.

As the company looks to maintain its position in the tough PC market while building its new growth businesses – mobile and data centres – it said it “put in place an aggressive new end-to-end ownership model to manage each business differently, led by strong leaders”, and is seeing improvements as a result.

For the quarter to 31 March 2017, the mobile unit reported a loss of $220 million, compared with a prior-year loss of $123 million, on sales of $1.77 billion, up from $1.55 billion.

Shipments outside of China in the recent quarter increased 17.4 per cent to 11.3 million units, growing faster than the market, although the company did not provide a figure for the performance in its home country.

The company said its mobile business resumed positive revenue and shipment growth in fiscal Q4, with strong performance cited in markets including India, Asia Pacific and Latin America.

Lenovo also said it is “breaking through in Western Europe”.

It also highlighted strong shipments of the Moto G device, and said it is on-track to ship its 3 millionth Moto Z.

Domestic difficulties
However, China, remained tough: the company is continuing to clear inventory, as well as rebuilding its brand and realigning channel strategy.

While not providing figures, Lenovo said it saw declines in revenue and shipments in its home market in the year to end-March, stating competition “remained very keen”.

Income was impacted by factors including component cost increases and branding work in China and EMEA.

In Q4, its core PC and smart device unit (including tablets) reported a profit of $288 million, down from $302 million, on revenue of $6.68 billion, up from $6.37 billion.

The unit registered its second consecutive quarter of shipment and revenue growth, but, like the mobile unit, found itself dealing with component cost increases.

It said it is delivering strong growth in segments where there is still potential, such as gaming, detachables, Chromebooks and, in China, “Millennial PCs”.

On a group level, profit of $107 million was down 41 per cent year-on-year, and revenue of $9.58 billion was up 4.9 per cent.

The revenue increase marked a turnaround, after five quarters of decline.