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Even the world's no.1 PC maker finds selling smartphones tough

Mat Smith, @thatmatsmith
August 13, 2015
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Lenovo is the biggest PC maker in the world, but smartphones remain a challenge. The company's mobile arm announced a pre-tax loss of $292 million for the three months ending in June: Motorola phones shipped stood at 5.9 million, down just less than a third from last year. The company now plans to cut 10 percent of its non-manufacturing jobs (roughly 3,200 people), aiming to save around $650 million in the second half of 2015. It's also writing down $300 million in unsold phones. The company's total net profit dropped 51 percent year-on-year, down to $105 million.

Lenovo's chief exec, Yang Yuanqing, told Reuters that he stands by the acquisition of Motorola, which cost $2.91 billion in 2014. He added that restructuring Motorola and Lenovo's smartphone divisions will take two to three quarters. This looks likely to cost $600 million, due to the "toughest market environment in recent years" -- likely why the company is trying all sorts of gambits.

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