Despite being one of the leading PC vendors, Lenovo is experiencing a tough financial period and recorded a $714 million net loss. This is the first loss the company has reported in 6 years and makes for some alarming reading. One root cause is a major restructuring programme resulting in 3,200 job losses. Additionally, the acquisition of Motorola was a costly endeavor, and Lenovo had to accept $300 million worth of unsold handsets.
PC sales also reduced by 17 percent compared to last year, but this is expected given the current market. Furthermore, the 17 percent drop is actually one of the better results when compared to other manufacturers. However, I’m pretty convinced the Superfish malware scandal didn’t do the company any favours and caused a great deal of negative publicity. As a result, I wouldn’t be surprised if consumers were more hesitant to buy Lenovo products in the future. On the other hand, the amount of people who actually know about this controversy is quite small and the average consumer doesn’t really follow the latest technology news.
Whatever the case, the financial results aren’t as worrying as they first seem due to Lenovo’s current costs. Realistically, there’s no reason why they can’t turn a profit again, but it will be especially difficult in the competitive smartphone sector.
