Lenovo continues to struggle as a smartphone maker
Lenovo has published its earnings for the fourth quarter of the 2017/18 financial year, and the results are… mixed. One of the report’s biggest headlines is that the company posted its fastest pace of revenue growth in more than two years, thanks largely to signs of life from its PC arm — revenue here climbed 16 percent to $7.7 billion during the quarter. Lenovo currently holds the unenviable title of world’s worst performing technology stock, so it’s clearly keen to tout this figure, and indeed, the company’s shares climbed as much as 4.4 percent after it published the results.
However, this finding comes amid a sea of otherwise disappointing results, including a 69 percent drop in net income — the biggest annual loss in nine years — which it attributed to higher component costs, an expected tax write-down and lower-than-anticipated income from asset disposals. Ongoing losses in its mobile division – where revenue fell 6 percent – aren’t going to help either.
Lenovo has been struggling with its smartphone offering for years. As Bloomberg‘s technology columnist Tim Culpan noted in a tweet, it’s no secret this section of the company has demonstrated unprofitability, so it seems absurd that Lenovo is claiming it retains the same value now as it did then. The company has rather vaguely said it will “focus on reducing losses in the new fiscal year”, but maybe it’s time that it takes a leaf out of LG’s book and has a complete rethink.
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