Lenovo outgrows rivals after stonking Q3

Chinese vendor sees ninth consecutive quarter of beating market growth and sees turnover grow 44 per cent

Lenovo outgrew its closest competition for the ninth quarter in a row, reaching record highs in sales, pre-tax profit and market share for its third fiscal quarter 2011/2012.

The Chinese vendor achieved global market share of 14 per cent for the quarter that ended 31 December 2011, and saw gross profit rocket by 47 per cent to $954m (£602m).

Turnover for the quarter stood at $8.4bn, a 44 per cent increase on the previous year.

Lenovo claimed that while the PC industry as a whole struggled to remain flat year on year, its own PC shipments increased 37 per cent, outpacing the industry growth/decline in China, emerging markets and mature markets alike.

Last year, the vendor revealed its strategy of focusing on PCs to dislodge its competition. It had already leapfrogged Dell by the end of last year and now has its sights set on HP, concentrating on all geographies, customer segments and product lines.

Yang Yuanqing, chief executive of Lenovo, said: “Despite the worldwide hard drive shortage in the past quarter, Lenovo continued to achieve strong growth with record results in market share and revenue, as well as a record high pre-tax income of $192m.

For the first time, Lenovo became the number one vendor globally in commercial PCs and consumer desktops.

“We saw strong progress in our mobile internet business. During the quarter, Lenovo sold more than 6.5m phones and almost half were smartphones. Lenovo's smartphone market share in China reached double-digit market share in December. We also saw strong momentum in our tablet business. All these successes demonstrate that Lenovo has built a strong foundation for the next steps beyond traditional PCs,” said Yang.

Lenovo’s reputation was also strong among industry watchers and partners. Ranjit Atwal, research director at Gartner, claimed that Lenovo stands out as one of the only vendors set for a robust 2012 in a soft UK PC market. The Chinese vendor has built on the heritage of the IBM business it acquired in 2005.

“From a business perspective, it is Lenovo [that is well placed]. They just do PCs, which has given them a bit of a backbone,” said Atwal. “They are the ones that are moving into consumer – they have opportunities there as well. For Dell and HP, [the question is] how do they attach PCs to their long-term growth projects?”

Shaune Parsons, managing director of partner Computerworld Wales, claimed that Lenovo has taken off in the channel over the last year. “Lenovo is taking the market by storm. We have been with them for years, but now it seems like every man and his dog wants to sell their stuff,” he explained.

Parsons added that he expects the vendor’s tablet PC to be a success in the B2B space.

“From a network manager’s point of view, the iPad is a nightmare,” he said. “The way Lenovo has gone about it, it allows a network manager to lock it down.”