Lenovo plans to axe 3,200 jobs

"Lenovo wants to be fully exposed to the losses in the current and subsequent quarters and will try to regain its growth trajectory later this year," Wang said.

Lenovo also pledged to release new Moto smartphones every six months to stay competitive in the handset business.

Chen Xudong, Lenovo's senior vice-president in charge of mobile businesses, said sales of Motorola's G and X series missed targets because of slow device updates and decision-making.

"Lenovo smartphones did not perform well in China due to unsuccessful product designs and marketing strategies," Chen said.

According to Chen, the company is attempting to seek new opportunities in other emerging markets such as the Middle East and Africa to lift shipments.

The 16.2 million units of Lenovo and Motorola smartphone shipped in the second quarter registered a mere 2.4 percent annual growth, while Apple Inc, Huawei Technologies and Xiaomi Corp recorded more than 30 percent growth in shipments, according to IDC.

Lenovo purchased Motorola from Google Inc in early 2014 for $2.9 billion.

Chen admitted that Lenovo handsets are "too complicated" for customers to understand. The company will focus on one or two flagship devices to reach more Chinese buyers in the future, he said.

Lenovo now has three sub-brands for smartphones. Besides Lenovo and Motorola branded devices, its affiliate launched a ZUK-branded affordable phone two days ago, targeting the 2,000 yuan ($333) market.

Nicole Peng, research director at Shanghai-based consultancy Canalys China, said Lenovo fell out of the top five in the second quarter because of sluggish sales and lower China market share.

Peng said Lenovo needs to completely overhaul its smartphone lineup.