Lenovo is selling its loss-making mobile phone business to Hony Capital – a private equity fund controlled by Lenovo’s parent, Legend Holdings – for US$100 million. Lenovo trails far behind international rivals Nokia, Motorola and Samsung and saw shipments fall 31% in the last quarter, with sales of US$108m accounting for only 2% of total company revenue. Lenovo Mobile, which made losses of US$18.6 million in the 2007 calendar year, was the last remaining unit of Lenovo’s non-core business.
Despite its mobile phone disappointment, the Chinese vendor has shone in its core PC business, where it is now the world’s fourth largest computer vendor. Worldwide shipments in this division grew 22 per cent in the last quarter compared with an industry average of 16 per cent. Total company sales rose 15% year-on-year to US$4.6 billion, while net profits nearly tripled to US$172 million.