Lenovo goes into enterprise 'attack mode' as it completes restructuring

Restructuring complete, the smartphones-to-servers tech giant is going after the competition.

Image: Lenovo

Lenovo is preparing to "aggressively" attack its competitors and invest in new areas as it completes its restructuring plans.

In its second quarter results, quarterly revenue stood at $12.2bn, a 16 percent year-over-year increase (23 percent in constant currency), although there was a net loss of $714m.

The company said the losses were the result of its restructuring plan, including the integration of IBM's System x business, the reorganization of Motorola Mobility and Lenovo's Mobile Business Group and clearing old smartphone inventory, which is expected to create cost savings of about $1.35bn a year.

Lenovo said it is now in a position to invest in new areas, "while aggressively attacking competition."

For example, in its Americas region the company said: "In Enterprise, Lenovo is entering attack mode with recently signed partnerships, which will capture opportunities by offering technologies that disrupt entrenched computing models."

Lenovo's PC Group -- which includes PCs and Windows tablets -- saw quarterly sales of $8.1bn, with pre-tax income of $406m. That's down 17 percent year-over-year, as foreign exchange fluctuations impacted demand in EMEA and Brazil.

The company shipped 15 million PCs in the second quarter, claiming a 19.7 percent share of the worldwide consumer market. Its share in the US market hit a record 13.3 percent, while in Asia Pacific it reached 19.3 percent and Latin America it stood at 15.3 percent. The company's goal is to hit 30 percent worldwide PC market share.

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Lenovo's Mobile Business Group -- which includes products from Motorola, Lenovo-branded mobile phones, Android tablets and smart TVs -- saw quarterly sales of $2.7bn, up 104 percent year-over-year thanks to the addition of Motorola. However, the group's pre-tax loss was $217m thanks to restructuring and clearing "aged inventory". Lenovo said the mobile business unit will reach break even in one to two quarters. The company sold 18.8 million handsets and 3.1 million tablets.

Lenovo's Enterprise Business Group -- which includes servers, storage, software and services sold under both the ThinkServer and System x brands -- hit sales of $1.2bn, a five-fold year-over-year increase due to the inclusion of System x, which contributed $900m in sales. This is the first time the enterprise business unit has grown revenue since System x was acquired.

Lenovo said that "major hyperscale wins" from Alibaba, Tencent and Baidu helped to drive breakthroughs for the business, which it predicted would hit $5bn in revenue "with good margin" one year after the close of the System x deal.

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