Lenovo to push mobile devices as profit soars
Lifted by hefty gains last quarter, mainland computer giant Lenovo Group plans to step up expansion of its mobile internet devices business and boost marketing efforts.
Lenovo, the world's third-largest supplier of personal computers, yesterday reported a 98.3 per cent rise in net profit to US$108.8 million in its financial first quarter ended June 30 from US$54.86 million a year earlier.
That was driven by healthy sales on the mainland and other emerging markets, as well as by strong corporate demand in markets such as North America.
The firm's net profit exceeded the US$78.6 million consensus forecast of seven analysts polled by Thomson Reuters.
Revenue hit a record US$5.92 billion, up 15 per cent from US$5.15 billion the previous year.
Market research firm International Data Corp estimated Lenovo shipped 10.28 million personal computers last quarter for a 12.2 per cent global market share.
That helped Lenovo unseat Taiwan-based rival Acer and join industry leaders Hewlett-Packard and Dell among the world's top three personal computer suppliers.
Chief executive Yang Yuanqing said it also marked 'the seventh consecutive quarter that Lenovo grew faster than any of the top five PC manufacturers'.
Despite those solid results, Lenovo saw its shares slip 6.53 per cent to HK$4.58 in trading yesterday on investor concerns that a possible global economic slowdown could hurt business and consumer spending.
Lenovo, however, believes that growth in enterprise computer demand 'will remain on track... for the next several quarters', Yang said.
The mainland accounted for 47.9 per cent, or US$2.8 billion, of total sales in the quarter. Mature markets made up 34.6 per cent, or US$2.1 billion, of its revenue. Emerging markets, excluding the mainland, accounted for US$1 billion of sales.
Laptop computers continued to be the largest contributor to Lenovo's sales worldwide. They generated 59.8 per cent of total revenue in the quarter to June, when sales grew 14 per cent year on year to US$3.5 billion.
In its first full quarter of operations, Lenovo's new Mobile Internet Digital Home business group saw a 34 per cent year-on-year rise in total shipments of internet-ready smartphones and regular mobile phones.
Yang said the company was confident of attaining more than 20 per cent market share on the mainland by the end of March next year. A new line of smartphones and media tablets will go on sale in overseas markets in the next few months.
Yang said the acquisition of German consumer electronics company Medion and a venture with NEC Corp will be leveraged to boost sales and marketing in Europe and Japan.