May 25 (NBD) -- Lenovo Group Ltd. (0992.HK) suffered a net loss of up to 189 million U.S. dollars in the fiscal year 2017-18 ended March 31, 2018, according to its fiscal report released Thursday. 

Revenue for the period rose 5.38 percent year on year to 45.4 billion U.S. dollars. The personal computer (PC) and smart device business was a strong revenue driver, contributing around 71 percent of the group's total, up 8 percent from the previous fiscal year. 

Lenovo said in the report that it has dethroned HP as the world's largest PC maker in terms of turnover and sales. Profit from the PC and smart device business before taxation was around 1.5 billion U.S. dollars across the fiscal year. 

In contrast to the slightly recovering PC business, the mobile phone business was still a woe to Lenovo. In the fiscal year 2017-18, the group reaped revenue of 7.241 billion U.S. dollars from the mobile business, representing a 6 percent year-over-year drop and accounting for around 16 percent of its total. 

At the subsequent media briefing after the release of financial results, Lenovo Chairman and CEO Yang Yuanqing said the mobile phone business didn't meet the expectations, and the company will focus on optimizing its brand strategy and business model for emerging markets and will cut expenditure in this niche sector by 30 percent to curb losses. 

Lenovo has been experiencing a hard time since the beginning of this year. 

Early this year, the PC marker was dropped form Hong Kong's benchmark Hang Seng Index, and then received a public backlash for not showing support for Huawei's 5G standard proposal. 

The company faces four challenges at present - shrinking mobile phone business in China, strong rivals in the B2B businesses like cloud computing, heavy dependence on the PC sector, and decline in ability of communicating with consumers, IT industry analyst Liu Huafang told NBD. 

In this case, Lenovo is endeavoring to turn the scale. 

Yang noted at the media briefing that the manufacturer is currently adjusting the corporate structure to adapt to the new smart Internet of Things (IoT) era. Next, the company will step up efforts to accelerate the integration of computing and communications technologies and to construct new UDS platforms to connect users, devices, and services, so as to strengthen its competitive edge in the fields of IoT, big data, and artificial intelligence. 

Liu Jun, executive vice president of Lenovo, also told NBD in a previous interview that his company will go all out to transform itself into a comprehensive service provider that integrates products, solutions, and services. Under the new scheme, it will concentrate on four sectors, one of which is smart IoT.

Yan Zhanmeng, research director for market research institute Counterpoint in China, said to NBD that by taking advantages of its distribution network for PCs, mobile phones, and other products, Lenovo could be able to expand its footprint to the smart home retail industry.  

Email: lansuying@nbd.com.cn