Lenovo Group reported a 51% drop in net profit in the first quarter of the year, falling to $105 million from $214 million in Q1 of the previous year. Turnover for the quarter was slightly higher year on year, rising 3% to $10.7 billion from $10.4 billion a year earlier. The company said it saw severe challenges in its main markets, with significant declines in the global PC and tablet markets, as well as slowing growth and increasing competition in smartphones. As a result, Lenovo is to restructure its mobile business group, in a bid to return to profitable, sustainable growth. (See Company News – Lenovo to Restructure Mobile Unit, Cut 3,200 Jobs.)
Lenovo’s PC group, which includes PCs and tablets, contributed $7.3 billion to turnover in Q1, while the mobile business group achieved turnover of $2.1 billion. This was 33% higher year on year, due to the inclusion of revenues from Motorola. The company shipped 13.5 million PCs in the quarter, down 7.1% YoY, 16.2 million smartphones, of which 5.9 million were Motorola devices (down 31% YoY), and 2.5 million tablets.
