Lenovo profits up, smartphone sales struggle
CHINESE technology giant Lenovo yesterday reported higher profits in the first quarter thanks to cost cutting, but sales of personal computers and smartphones continued to struggle.
The company's net profit was up 64 per cent year
on year at US$173 million (S$232 million).
However, revenue sank
6 per cent due to slowing sales in its PC and fledgling mobile handset businesses.
The Beijing-based company, which has traditionally made computers, has been trying
to broaden its smartphone business as the market for
But it has struggled to
keep pace with Apple and Android rivals.
Revenues from its PC and smart-device business, which includes tablet computers, dropped 7 per cent.
Its mobile business also fell 6 per cent and the division reported an operational loss
of US$163 million.
However, the company said its PC business was "better than expected", citing a global market decline of 4 per cent, while its smartphone business "stabilised".
It protected profit margins by reducing operating expenses by 17 per cent year on year in the first quarter.
"Lenovo managed to deliver profit growth from
its businesses, driven by efficiency improvements," said Yang Yuanqing,
the firm's chairman.