Lenovo has reported a net loss of $714 million after being hit by restructuring costs.
Second-quarter earnings were affected by charges of $923 million related to job cuts and clearing stocks of smartphones.
However, the loss was not as large as forecast and the Chinese computer and smartphone giant’s revenue rose 16% to $12.2 billion.
Lenovo, which is the world’s biggest PC maker, saw its Hong Kong-listed shares rise more than 5% on the news.
Photo Lenovo
The company said it had continued to experience a declining PC market during the period, together with slowing smartphone and tablet sales globally.
In a statement, Lenovo said: “The macro-economy and global markets remained challenging, along with currency fluctuations in emerging markets.
“In addition, the China smartphone market continued to see a market shift from traditional carrier channels to online, while competition in China further intensified.”
Lenovo said that its restructuring program, which included 3,200 job cuts announced earlier this year, was set to generate annual cost savings of $1.35 billion.
In 2014, Lenovo bought the Motorola brand from Google for $2.9 billion in an attempt to boost its position in the smartphone market.
Lenovo said its share of the global smartphone market had increased to 5.3% in Q3 of 2015, pushing it to the number four position worldwide.
Motorola has launched low-cost smartphone Moto G that includes features more commonly found in higher-priced models.
The Moto G will be sold contract-free from $179 in the US.
The handset has a 4.5 in (11.4 cm) 720p high-definition screen, a five megapixel rear camera, a 1.3MP front one, and runs the latest versions of the Android operating system.
Analysts suggest the budget end of the market is set to enjoy huge growth.
The Moto G is being launched in 30 countries including the US, UK, France, Germany and parts of Latin America and Asia. That contrasts with Motorola’s last model – the Moto X – which is currently only available in the US.
Motorola has launched low-cost smartphone Moto G that includes features more commonly found in higher-priced models
Its price makes it slightly cheaper than Samsung’s Galaxy S3 Mini, HTC’s Desire X and Sony’s Xperia M but still more expensive than Huawei’s Ascend G510.
However, Motorola’s device is the only one of these to come preinstalled with the Android Jelly Bean operating system. The firm is also promising to release an upgrade to the newest version of its Android platform, KitKat, in the near future.
It also has the highest resolution display and is the only one to feature a quad-core, rather than dual-core, CPU (central processing unit). This should in theory allow it to offer superior processing power while minimizing the toll on battery life.
Motorola representatives revealed the handset would be targeted at three groups:
- People in developing countries who wanted to move from a basic “feature phone” to one that could run a wide range of apps
- Students and children in richer nations, for whom price was still an issue
- Existing smartphone owners frustrated by the prospect of spending $800 every couple of years to upgrade to another top-end model [youtube DljaASvRUIA 650]
Motorola Mobility is to cut 4,000 staff worldwide as part of efforts to return to profitability.
The job losses are the equivalent of 20% of its workforce.
The firm, bought by Google last year, said it planned to close or merge about one third of its 90 facilities which include offices and factories.
US-based Motorola also announced a shift in emphasis away from low-cost non-smartphones to “more innovative and profitable devices”.
Motorola Mobility is to cut 4,000 staff worldwide as part of efforts to return to profitability
Two-thirds of the jobs will go outside of the US, Google said. It expects the cost of severance packages to be $275 million.
“Motorola is committed to helping them through this difficult transition and will be providing generous severance packages, as well as outplacement services to help people find new jobs,” a statement said.
Motorola has lost money in 14 of the past 16 quarters, Google said.
The company, which once dominated the mobile phone market, has fallen behind its competitors, including Apple and Samsung.
According to one industry watcher, Strategy Analytics, Samsung overtook Nokia as the world’s biggest seller of mobile phones earlier this year.
Samsung sold more than 93 million handsets in the first three months of 2012, giving it a 25% market share. By contrast, Motorola said it had sold almost 9 million mobile devices over the same period, including 5.1 million smartphones.
Its most recent financial results showed that Motorola Mobility recorded a loss of $86 million in the first quarter of the year. That was greater than the $81m net loss it made in the same period a year earlier.
Google bought Motorola Mobility last year in a $12.5 billion deal, giving it access to more than 17,000 technology patents.
