Original title: Lenovo lost 189 million US dollars in mobile phone business
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Today's Lenovo Group is in troubled times.
It is at this juncture that at noon today (May 24), Lenovo Group released its annual report for the fiscal year 2017 / 18 (for the year ended March 31, 2018).
According to the annual report, Lenovo Group's annual revenue was 45.3 billion US dollars, the highest in three years. However, the annual net loss was US $189 million, which was less than the market expected loss of US $147 million. Among them, the net profit of the fourth quarter was 33 million US dollars, lower than the market expectation of 113.8 million US dollars.
Global PC market declines for 14 consecutive quarters
Is Lenovo OK?
Lenovo Group's earnings report, the most concerned content is its personal computer business. Because the global PC market's shipment volume has declined for the 14th consecutive quarter.
Lenovo Group said that after two years of decline, the revenue of the 'PC and smart device business' was back on the growth track, with revenue rising 8% over the previous fiscal year to US $32379 million, accounting for about 71% of the group's overall revenue.
However, due to the increased costs caused by the rising price of parts, the pre tax profit of the 'PC and smart devices business' decreased by 2% to $1.459 billion compared with the previous fiscal year, and the pre tax profit margin decreased by 0.5 percentage point to 4.5% year on year.
In 1984, Liu Chuanzhi, with 10 computer science and technology personnel and 200000 yuan of start-up capital, began to rent a house in Beijing. After Lenovo took over IBM, NEC and other personal computer businesses, it established its position in the world at one stroke. In the following years, Lenovo quickly surpassed Dell and HP through rapid integration.
However, the global PC market is shrinking due to the squeeze of tablet computers and smart phones.
According to the report of global PC shipment in the first quarter of 2018 released by market research institutions Gartner and IDC, the global PC market shipment has declined for the 14th consecutive quarter since 2012.
According to the data, HP ranked first in global PC shipment, while Lenovo and Dell ranked second and third respectively. For a long time, Lenovo Group was the 'overlord' of global PC. however, in the first quarter of 2017, after HP surpassed Lenovo as the number one in terms of shipment volume, Lenovo lost its number one position for the first time since 2013.
Who did Lenovo sell its mobile phones to?
In PC competition, Lenovo has already entered the stage of brutal stock fighting, and started to make smart phones, hoping to open up the situation in the mobile terminal.
But it backfired. When Huawei, Xiaomi, vivo and oppo tried their best to squeeze into the mobile market, Lenovo still indulged in its own brands, and Motorola still took a difficult high-end route. With more and more market entrants, Lenovo Mobile has little advantage.
In 2014, Lenovo + Motorola ranked third in the world in terms of shipment volume, with a market share of 7.9%, ranking first among domestic manufacturers. However, in 2017, when the market share of Huawei, Xiaomi, oppo, vivo and other domestic manufacturers continued to rise, Lenovo's performance continued to decline.
In the 2017 / 18 fiscal year, Lenovo Group's mobile business revenue was $7.241 billion, down 6%, accounting for about 16% of the group's total revenue. For the mobile business, Lenovo's goal now is to reduce losses. Lenovo Group said in the financial report:
In the face of fierce competition in mobile business, the group restructured its strategy, continued to strengthen the Latin American and North American markets, and reduced expenses, so as to achieve the goal of significantly reducing future losses.
If it's not easy to sell in China, you have to find a market elsewhere. Lenovo Group reported significant growth in mobile business in Latin America, with sales up 40% and sales in North America up 57% year on year.
In the ranking of global smartphone sales in 2017 released by counterpoint, a research company, Lenovo's mobile phone sales were 49.7 million, down 2% year on year, ranking eighth in the world, with a market share of only about 2%. According to GfK data, Lenovo's sales volume in the domestic market is only 1.79 million, with a market share of less than 1%.