Lenovo gains in PC share and smartphones

Hong Kong-listed vendor trumpets 20 per cent share of PC market

PC maker Lenovo enjoyed revenue of $10.4bn (£6.2bn) in its first quarter ending 30 June, representing an 18 per cent value surge overall for the vendor year on year.

Lenovo Group filed a report with investors on its first fiscal quarter for the 2014-15 year yesterday Hong Kong time, noting quarterly pre-tax income up 22 per cent year on year to $263m.

Gross profit was up 13 per cent year on year to $1.3bn, while operating profit rose 40 per cent to $283m.

Yuanqing Yang (pictured), chairman and chief executive of Lenovo, said the PC industry was recovering, and the smartphone market was going mainstream as well.

The firm is number three in smart connected devices, which saw 28 per cent expansion in the quarter in volume terms, and this quarter saw it sell more smartphones than PCs for the first time.

"And [as] our acquisitions of Motorola Mobility and IBM x86 proceed toward completion, we see even more opportunity to keep growing rapidly," he said.

"Lenovo continues to outperform the market and meet its commitments to improve profitability in core businesses, while building strong pillars for future growth across the entire portfolio."

Lenovo has been the world's largest PC maker by revenue for five consecutive quarters, and now boasts that its share accounts for 20 per cent of the market. Its PC shipments rose 15 per cent to 14.5m units in Q1.

The company is number four in smartphones and number three in tablets in volume terms, according to IDC market share statistics.

EMEA was "extremely strong" in Q1, according to the vendor. The EMEA take rose 49 per cent to $2.8bn year on year, accounting for 27 per cent of Lenovo's revenue globally during the quarter. Across the region, Lenovo became number one in notebooks, and sold more than a million smartphones for the first time.

PC shipments alone rose 18 per cent, the vendor said.

China remains its biggest market, paying the vendor a total $3.8bn for various offerings in the Q1 period.

Products
Laptop shipments were down 3.7 per cent year on year overall and laptops were responsible for 49 per cent or $5.1bn of the vendor's total revenue in Q1.

However, that has narrowed from last year's Q1 decline of 13 per cent year on year in the category, and its laptop revenues were actually up in Q1 by 12 per cent.

Lenovo was number one in desktops, enjoying a 12.1 per cent rise in shipments in Q1 worldwide, slightly higher than last year. That compared with an industry-wide desktop sales increase of just 2.4 per cent, the vendor said.

Mobile device revenues were consolidated this Q1, enabling the vendor to record a 32 per cent increase year on year to $1.6bn overall in Q1. This accounted for 15 per cent of Lenovo's total Q1 turnover.

And Lenovo is "engaging partners to drive innovation across new hardware categories", the announcement said, such as as smart connected devices via its new business development platform.