Data from two reports clearly demonstrate why Lenovo Chair Yang Yuanqing shuffled leadership in the company’s smartphone business in June:

Shipments of Lenovo and Lenovo Motorola smartphones plummeted in the second quarter.

It’s the latest bad news for Lenovo, which also has taken a hit in tablets. Yes, Lenovo remains No. 1 in PCs but it appears turbulent times may be ahead for the global tech company, which operates its executive headquarters in Morrisville and is determined to become the No. 1 company in Internet-connected devices.

Shortly after closing on its Motorola acquisition last year, Lenovo touted its smartphone business as becoming No. 3 in the world behind perennial leaders Samsung and Apple.

No more.

Instead, two China-based rivals (Huawei and Xiaomi) have vaulted ahead of Lenovo.

According to Strategy Analytics, Lenovo-Motorola shipments fell to 16.2 million from 23.8 million in the same quarter a year ago.

IDC reported similar numbers.

The numbers also fell sequentially, dropping from 18.7 in the first quarter of this year, according to IDC.

The Lenovo-Motorola market share plummeted as well to 4.8 percent from 8.1 percent, Strategy Analytics reported.

Yang has had in place a “protect and attack” strategy for years: Protect Lenovo’s China base of business and attack elsewhere. But Huawei and Xiamoi are attacking in China – hard.

Noted Woody Oh, director at Strategy Analytics: “Huawei moved up to third position with a record 9 percent global smartphone marketshare in Q2 2015. Huawei is expanding rapidly across Asia, Europe and North America, putting competitive pressure on key rivals such as Samsung, Xiaomi, Lenovo, LG, Sony and Alcatel.

“Xiaomi recaptured fourth position with 6 percent global smartphone marketshare in Q2 2015, nudging ahead of Lenovo-Motorola in fifth place with 5 percent share. Xiaomi has good distribution channels and competitive pricing in its large home market of China, enabling it to stay in front of Lenovo-Motorola who is struggling with the transition from 3G to 4G smartphones in China and the United States.”

Overall, Strategy Analytics says smartphone shipments increased 15 percent in the quarter. That’s the slowest rate of growth in six years, but the market is still growing and it appears Lenovo has fallen off the pace in a big way.

IDC, meanwhile, said combined Lenovo-Motorola shipments dropped 33 percent.

Just last week, Motorola unveiled its latest smartphones under the Lenovo Motorola banner. They are cheaper that Apple and Samsung equivalents, plus offer customized features to make them more personal. But will they reverse the trend?

Here are the latest Strategy Analytics numbers:

Global Smartphone Vendor Shipments (Millions of Units)

Vendor, Q2 ’14, Q2 ’15

  • Samsung: 74.5, 71.9
  • Apple: 35.2, 47.5
  • Huawei: 20.1, 30.5
  • Xiaomi: 15.1, 19.8
  • Lenovo-Motorola: 23.8, 16.2
  • Others: 126.3, 153.6
  • Total: 295.0, 339.5

Global Smartphone Vendor Marketshare (%)

Vendor, Q2 ’14, Q2 ’15

  • Samsung: 25.3%, 21.2%
  • Apple: 11.9%, 14.0%
  • Huawei: 6.8% 9.0%
  • Xiaomi: 5.1%, 5.8%
  • Lenovo-Motorola: 8.1%, 4.8%
  • Others: 42.8%, 45.2%