Lenovo eyes further PC, smartphone growth

Personal computer maker seen defying slump with record sales for quarter

PUBLISHED : Monday, 28 January, 2013, 12:00am
UPDATED : Monday, 28 January, 2013, 4:39am

For 15 consecutive quarters, Lenovo has managed to outpace the growth of the overall personal computer industry.

Lenovo saw its personal computer shipments in the quarter to December rise 8.2 per cent to a record 14 million units from 13 million a year earlier, according to preliminary estimates by market research firm Gartner.

That compared favourably against the 4.9 per cent drop in worldwide shipments to 90.4 million units in the same quarter.

At its fiscal third-quarter results announcement on Wednesday, Lenovo is expected to announce continued gains for its personal computer business. Its optimism defies a global slump in sales caused by the lingering economic slowdown and consumers' increased demand for media tablets.

"We're continuing to gain share and steadily improve our overall profitability, while outgrowing the market," Lenovo spokeswoman Angela Lee said.

Bernstein Research senior analyst Alberto Moel estimated Lenovo's net profit reached US$184.7 million on revenue of US$9.4 billion in the quarter to December. The company earned US$153.5 million on sales of US$8.4 billion a year earlier.

Lenovo may have remained the world's fastest-growing supplier of personal computers in the quarter to December with a 15.5 per cent market share, but it was edged out by Hewlett-Packard as global market leader with its 16.2 per cent share. Lenovo unseated HP as industry leader in the previous quarter.

"Historically, Lenovo has seen softer PC shipment growth in that quarter as a result of seasonal factors and our smaller retail business in developed markets," Lee said. "Lenovo is confident it will soon be the clear PC leader."

The company, which operates in more than 160 markets, recently started a reorganisation that will see its operations divided into two units, which could help sharpen both its manufacturing and marketing efforts. The Lenovo Business Group will handle the Idea-brand personal computers, media tablets, smartphones and "smart" televisions, while the Think Business Group will cover the premium-priced Think-brand personal computers, servers and storage systems.

Lenovo chief financial officer Wong Wai-ming said last week that new acquisition opportunities, including BlackBerry handset maker Research In Motion, were being considered, a Bloomberg report said. That bodes well for Lenovo's efforts to grow its largely domestic smartphone business.