Lenovo has announced that its China-based businesses will undergo restructuring, with the company aiming to intensify its focus on consumers. The Chinese businesses of the Lenovo Group will be restructured to two new major divisions, the consumer-focused division, and the data center division. The consumer-focused division includes Lenovo’s PC and smart device enterprises based in China. Also included in this division is Lenovo’s smartphone business. Meanwhile, the data center division will include teams selling enterprise servers and storage devices. By restructuring the China-based businesses into two divisions, Lenovo aims to strengthen its position in the said country by taking advantage of new opportunities more effectively. Accompanying this change in structure is the change in staff, with new leaders called in to head the divisions. Leading the consumer division is the former head of Lenovo’s mobile business group, Liu Jin. Liu Jin’s experience in the mobile business group will aid Lenovo in managing the consumer-focused division, which primary products will likely include mobile devices.
The restructuring of Lenovo comes at a time that the Chinese electronics company is facing financial troubles. In the third quarter of the current financial year, Lenovo reported a massive 67 percent drop in net profit. This is despite the slight revenue increase of two percent in its flagship PC business, which comprises 70 percent of the company’s revenue. While there is some positive news in the third quarter, Lenovo is still facing trouble due to the expected decline of the PC market globally. It is also facing stiff competition from other PC manufacturers like HP, which may result in the further diminishing of Lenovo’s lead in the PC market.
While Lenovo is known as the largest PC manufacturer globally, it is also known among Android enthusiasts as the current owner of Motorola. The Chinese electronics firm acquired Motorola from Google in 2014, with hopes of gaining market share in the lucrative smartphone market. Unfortunately, Lenovo’s mobile phone division has yet to turn a profit, with Lenovo admitting that the Motorola acquisition did not meet their expectations. The inability of the company’s smartphone business to curb its losses affected Lenovo’s bottom line negatively. The restructuring of Lenovo’s Chinese enterprises could provide a boost to its smartphone sales, as Lenovo becomes more responsive to the challenges faced by the consumer-facing businesses like the mobile phone division.