Lenovo’s strategy for the surviving the so-called “post-PC” era is to keep selling PCs
The number one supplier of PCs in the world continues to outperform the sector as a whole, while simultaneously taking advantage of the mobile market. Suffice to say, Lenovo has things figured out, though if you need hard numbers to drive the point home, you need only look at the company’s results for its first fiscal quarter ended June 30, 2014. Continuing where it left off last quarter, Lenovo posted quarterly revenue of $10.4 billion, up 18 percent year-over-year, along with a 23 percent year-over-over bump in earnings to $214 million.
Lenovo maintained its ranking as the world’s largest PC maker for the fifth consecutive quarter. Interestingly, Lenovo’s laptop shipments declined 3.7 percent compared to last year, though that’s far better than the 13 percent decline it suffered two years ago. Nevertheless, consolidated revenues for Lenovo’s laptop business totaled $5.1 billion, up 12 percent versus last year and representative of 49 percent of the company’s total revenue.
Meanwhile, desktop PC shipments increased 12.1 percent year-over-year, far outpacing the industry average of a 2.4 percent gain. Lenovo collected $3 billion in revenue from its desktop PC sales, which is up 20 percent compared to last year and representative of 29 percent of the company’s total revenue.
Lenovo also saw gains in its Mobile Device Business, including smartphones and tablets. Revenue from these items jumped 32 percent year-over-year to $1.6 billion. In China, Lenovo is the leading smartphone maker, and it’s the third largest maker of tablets in the world with 2.3 million devices shipped last quarter.
“This has been a quarter of milestones for Lenovo – record PC share, a number three ranking in worldwide tablets for the first time, and an even stronger number four global smartphone position,” said Yuanqing Yang, Chairman and CEO of Lenovo. “As the PC industry recovers, the smartphone market continues its shift from premium to mainstream, and our acquisitions of Motorola Mobility and IBM x86 proceed toward completion, we see even more opportunity to keep growing rapidly. Lenovo continues to outperform the market and meet our commitments to improve profitability in our core businesses, while building strong pillars for future growth across our entire portfolio.”
Another tidbit to file away is that Lenovo shipped more smartphones than PCs for the first time ever with a record 15.8 million units, up 29 percent. Under different circumstanced, we’d be worried that Lenovo might choose to abandon or reduce its focus on PC sales, but given that it’s performing exceptionally well in both areas and is the top PC maker in the world, it’s not a concern.