Lenovo has released its financial results for the fiscal quarter ended 30 June 2015. The Chinese company claims to have achieved 'solid results'. However due to 'severe challenges in its main markets' it has suffered some terrible sounding income drops.
Looking at the numbers, Lenovo's quarterly revenue was US$10.7 billion, a three percent increase year-over-year. However its pre-tax income for the same period decreased 80 percent year-over-year to US$52 million. Net income declined 51 percent year-over-year to US$105 million.
The numbers look bad but Lenovo competed well. It has now captured a record worldwide share of 20.6 percent of the PC market – it remains No.1 PC maker in the world for the ninth straight quarter. In the same market it has gained share in every geographic region and achieved the No.3 position in the critical U.S. market, with record high share of 13 percent. In smartphones, Lenovo branded devices sold outside China were up by 68 per cent. In tablets Lenovo claims it has gained market share and secured the No.3 spot.
Action plan
Accompanying the results Yuanqing Yang, Chairman and CEO of Lenovo, said that the company must "take proactive and decisive actions in every part of the businesses," in order to build long term sustainable growth. He talked about reducing costs, increasing efficiency and more specific restructuring plans.
Lenovo plans to grasp 30 per cent of PC market share by taking advantage of consolidation. Its smartphone business will begin to be led by Motorola for design, development and manufacturing. The smartphone range available will be streamlined with fewer, more clearly-differentiated models. It will seek to reposition the Enterprise Business Group to align with the most attractive market segments.
The companywide efficiency drive will reduce expenses by about $650 million in the second half of this year and about $1.35 billion on an annual basis. Lenovo says it will cut 3,200 jobs from its non-manufacturing workforce around the world (10 per cent of such positions, equal to 5 per cent of the total Lenovo workforce).
Lenovo BIOS trickery
In other Lenovo news today the company is squirming having been found using "using rootkit-style techniques to put its own software on to clean Windows installs," via BIOS programming, reports Computing. Since the 'feature' came to light Lenovo has released a BIOS flash update which "disables and or removes this feature".
