Lenovo has decided to enter the mobile phone OEM market to improve the capacity utilization of its mobile phone manufacturing plants.
According to reports in Chinese local media, entering the mobile phone OEM sector is part of Lenovo's mobile phone business restructuring plan. At the end of August 2015, Lenovo implemented major restructuring to its mobile phone business. As a result of this move, Motorola team will lead the design, development and manufacturing of Lenovo smartphones.
Lenovo announced at that time that they would take three actions: create refined products; achieve profitable growth instead of simply expanding sales and market share; and accelerate the realization of supply chain collaborative efficiency.
Prior to this, Lenovo published its performance report for the first financial quarter of 2015/2016 financial year in mid August. The report said that during the three months ended June 30, 2015, Lenovo's mobile phone department suffered pre-tax losses of USD292 million, which was about CNY1.86 billion.