Lenovo’s Q4 earnings reveal Motorola ‘integration efforts did not meet expectations’

Lenovo has now published its financial earnings report for the final quarter of its 2015/16 fiscal year, ending in March. Highlights for the Hong Kong-based company include full year revenue of $44.9 billion, with Q4 revenue of $9.1 billion, which is down 19% on the same quarter last year. On the whole, it was a fairly uneventful quarter, but Lenovo recognizes its bid to bring in Motorola hasn’t gone as smoothly as planned.

On the whole, Lenovo’s business made good money last year, and in the final quarter. Its PC business saw strong profits and market share while its tablets outgrew the industry. Even its mobile business performed well with strong growth throughout the year, especially in the Asia Pacific and EMEA (Europe/Middle East/Africa) regions.

The Mobile Business Group (MBG) — which includes Motorola products, Lenovo-branded smartphones, Android tablets and smart TVs — saw its quarterly sales reach $1.7 billion on 10.9 million smartphone shipments.

Despite Motorola contributing 5 million of those units, Lenovo says the “results show integration efforts did not meet expectations”. This is more than likely due to the weaker-than-expected performance in the US, while China shipments dropped 85%.

Lenovo has learned a great deal since the close of the Motorola acquisition and is applying learnings quickly, with actions in organization, leadership and approach. The two new co-presidents focused on China and the rest of the world (RoW) now have the right focus. China is still the most competitive market and Lenovo intends to return to growth there by continuing to drive the shift from carriers to open market and leveraging its ZUK brand to rebuild its end-to-end competitiveness. In RoW, Lenovo will maintain high growth in emerging markets and get the US business back on track with a competitive product portfolio.

You can read the rest of Lenovo’s detailed financial breakdown over in the company’s newsroom. In the mean time, we have Lenovo’s Tech World event in San Francisco to look forward to next month, where the company is due to announce its first Project Tango-equipped smartphone for consumers, as well as the new range of Moto Z smartphones.

The Moto Z will be Lenovo’s first big push to tackle the high-end market in North America where competition is fierce and traditional flagships are being undercut by ambitious manufacturers like OnePlus, Huawei, ZTE and Nextbit. By releasing a range of modular enhancements alongside the Moto Z, and DROID-branded Verizon versions, Lenovo seeks to regain its competitive edge.