Lenovo to rev up smartphone and premium laptop PC sales

Computer giant posts record gains in quarter to December, and intends to step up expansion of smartphones and premium PCs segments

PUBLISHED : Thursday, 31 January, 2013, 12:00am
UPDATED : Thursday, 31 January, 2013, 5:38am

Lenovo, which claims to have recorded its "best quarter ever", will this year step up the international expansion of its smartphone business and sales of premium-priced laptop computers.

The technology giant yesterday reported a 34 per cent net profit increase in its fiscal third quarter ended December 31 to a record US$204.9 million, up from US$153.4 million a year earlier.

That hefty gain was attributed to a record high shipment of personal computers to 14.1 million units last quarter and strong sales of its smartphones and media tablets. It also beat the average estimate of US$178.4 million from a poll of 11 analysts by Thomson Reuters I/B/E/S. Total fiscal third-quarter revenue for Lenovo, which operates in more than 160 countries, rose 12 per cent to a record US$9.4 billion, compared with US$8.4 billion the previous year. The mainland accounted for 43 per cent of worldwide sales.

"This was the 15th quarter in a row that the company grew faster than the [personal computer] industry," Lenovo chairman and chief executive Yang Yuanqing said. "Lenovo gained share points in every geography, every product category and in every respective customer segment."

Revenue of the firm's personal computer business advanced 7 per cent year on year to about US$7.9 billion last quarter, when its global market share reached a new high of 15.9 per cent.

Sales of its nascent Mobile Internet and Digital Home division - covering smartphones, media tablets and internet-linked "smart" televisions - also climbed, up 77 per cent year on year to US$998 million.

Yang said Lenovo's smartphone shipments have reached critical scale, enabling that division to become profitable for the first time in the quarter to December. He estimated that the company shipped nine million smartphones and 400,000 basic-feature mobile handsets during that period. It is now selling smartphones in Russia, Vietnam, the Philippines, Indonesia and India.

Lenovo is expected to build up its smartphone sales this year by pushing deeper into emerging markets, outside the mainland. Yang said: "We have very good channel and brand awareness in emerging markets."

Yang added that demand for Lenovo's premium-priced "convertibles", ultra-lightweight devices that combine laptop and media tablet functions, would start expanding this year. He said the firm is now seeing healthy demand for laptops in the US$700 and US$900 price ranges, especially in the United States.

Market research firm IDC last month said Lenovo seized a 7 per cent share of the world market for "smart connected devices", behind leaders Samsung Technologies and Apple.