Since a bruising fall from its spot as the world's third-largest mobile phone maker following its acquisition of Motorola three years ago, China's Lenovo Group  is counting on a push upmarket to stem the losses in its smartphone division.

Although Lenovo, the world's largest PC maker, returned to profit in March this year, increased marketing and component costs mean the smartphone business still posted a loss. 

The group's problems began after it acquired Motorola Mobility from Google for 2.9 billion US dollars in 2014 but struggled to integrate the assets. Combined with fierce competition from lower-end manufacturers in its home market of China, such as Xiaomi and Oppo, Lenovo saw its global position fall to eighth in 2016.

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At a press conference in Hong Kong on Thursday, Lenovo China Chairman Yang Yuanqing said the company aimed to prioritize mature markets, which he said needed brands and innovative products, in contrast with emerging markets, which need efficiency. "We will have two teams catering to the two kinds of markets with different product lines," Yang noted.

Lenovo faces its toughest battle in its home base of China, where it has slipped out of the top 10 smartphone vendors. The company is shifting focus in its home market to its online-focused ZUK brand, while its global strategy will be centered around the Motorola name.

The company currently has three phone brands in China - the premium Moto brand, the cheaper Lenovo series, and the entry-level ZUK, launched in 2015.

Lenovo tablets and mobile phones are displayed during a news conference on the company's annual results in Hong Kong. /Reuters Photo

In contrast to its weak performance in its home market, many Lenovo products have sold well overseas. The company is the second-biggest smartphone vendor in Brazil, and the fourth-biggest in India. In addition, the company is to gain three more telecom partners in the US this year, while its performance in Western Europe is improving.

Average sale prices of Lenovo's mobile products rose 15.1 percent in the past year, according a company report.

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Based on its strong performance in international markets, some analysts believe Lenovo should cut its mobile losses in China and focus on consolidating its strong growth in other markets, such as India.

"I think they should deep-six their China mobile business. Their non-China probably has a chance if it's very narrowly geographic and product focused," noted Alberto Moel, analyst at Bernstein. 

Despite calls to cut its losses in China, Yang insists there are no plans for Lenovo to walk away from the domestic Chinese mobile market. "We would never give up our China mobile business, because it is 30 percent of the global market," he said.