Lenovo earnings up 34%, smartphone business in China now profitable
Lenovo is close to passing HP to become the world's largest PC vendor
IDG News Service - Lenovo's profit for its fiscal third quarter grew by 34% over last year, as the company also reported that its smartphone business in China had become profitable for the first time.
For the quarter ended Dec. 31, Lenovo's net profit reached a record $205 million, the company said on Wednesday. Revenue totalled $9.4 billion, an increase of 12% from the same period a year ago.
The Chinese company is within striking distance of overtaking rival Hewlett-Packard for the top spot as world's largest PC maker. In the quarter, HP had a market share of 16.7%, according to preliminary results from research firm IDC. Lenovo was just one percentage point behind.
PC shipments drove the company's strong growth, reaching a record high of 14.1 million units. Almost half of Lenovo's revenue, 43%, come from China, now the world's largest market for PCs. It has been the nation's largest PC vendor since 1997, and currently has a 36.7% share of its market, according to the company.
But outside of China, the company's sales have also been growing, despite the sluggish PC market. Lenovo said it made "significant inroads" into the high-end consumer segment in North America for the first time, with its sales of Windows 8 convertible devices. It had a 30% share of Windows 8 convertibles priced $700 and higher, and a 45% share of devices at $900 and higher, it said.
Earlier this month, Lenovo said it would reorganize its operations. This is leading to the creation of a so-called "Think Business Group", which will develop premium products for commercial and consumer segments and is expected to make use of the ThinkPad brand name.
While Lenovo's business mainly focuses on PCs, the company's smartphones are also gaining market share in China. In last year's third quarter, the company ranked as the second largest smartphone vendor in the country and trailed behind Samsung, according to IDC.
Lenovo's Mobile Internet and Digital Home business group, which includes its smartphones, saw its revenues increase 77% year-over-year to almost $1 billion in the quarter. This made up 11% of the company's total sales, with its smartphone business in China becoming profitable.
- SANS: Next-Generation Datacenters = Next-Generation Security This whitepaper takes a look at some new technology that may allow security teams to implement more flexible and capable protection models in...
- SANS: Protecting Virtual Endpoints with McAfee Server Security Suite Essentials SANS review of McAfees Server Security Suite Essentials that address some of the emerging challenges of securing virtual platforms and cloud environments.
- Safeguarding the Next-Generation Data Center Use of virtual and cloud servers has exploded. Unfortunately, security often lags behind. McAfee recommends looking at innovative solutions in order to erect...
- Aberdeen: Securing the Evolving Datacenter This report highlights ways security technologies and services are evolving to provide the visibility and control needed to deploy workloads flexibly in the...
- Is SQL Server AlwaysOn really as powerful? Tips and Tricks from the field With the introduction of AlwaysOn, Windows Clustering Services is now more critical than ever.
- What Does it Take to Deliver a Superior Customer Experience? The Two Top-Rated Online Retailers, B&H Photo and Crutchfield Electronics, Share Their Secrets Discuss practical CX tools and service methods such as contact center agents and the use of realtime speech analytics to help contact center... All PCs White Papers | Webcasts