Lenovo leads growth in PC shipments as overall industry declines

PUBLISHED : Thursday, 10 April, 2014, 9:41am
UPDATED : Thursday, 10 April, 2014, 9:41am

Lenovo could set new record earnings in its financial year to March 31 after posting the strongest growth among the world’s top suppliers of personal computers last quarter, while the overall industry continued to decline.

In separate preliminary estimates released on Thursday, technology research firms IDC and Gartner said global shipments fell for the eighth consecutive quarter in the three months to March 31 but showed signs of improvement.

Weak consumer demand was offset by a surge in corporate replacements of personal computers before Microsoft officially retired Windows XP, its 12-year-old operating system, on April 8. The software giant has been encouraging a shift to its newer platforms, either Windows 7 or Windows 8.

IDC said Lenovo, the world’s largest supplier of personal computers, grew its shipments by 10.5 per cent in the March quarter to 12.96 million units, representing a 17.7 per cent share of the global market.

Gartner calculated a 10.9 per cent increase to 12.91 million units, representing a 16.9 per cent market share.

“Despite a challenging environment, Lenovo has again proven its ability to outperform the market as the clear global leader in PCs,” Lenovo chairman and chief executive Yang Yuanqing said on Thursday.

“We see plenty of room for innovation and profitable growth in PCs and are optimistic about the future of the industry.”

Quarterly revenue at Lenovo, which operates in more than 160 countries, sailed past the US$10 billion mark for the first time in the three months to December 31 after it seized a market share of 18.5 per cent, a historical high.

Lenovo’s PC shipments last quarter were better than expected, with steady growth in large emerging markets such as India and Indonesia
Ricky Lai, Guotai Junan International

Ricky Lai, an analyst at Guotai Junan International, said Lenovo is likely to report new record-high earnings in its financial year to March 31.

“Lenovo’s PC shipments last quarter were better than expected, with steady growth in large emerging markets such as India and Indonesia,” Lai said.

He forecast the computer giant, which has its headquarters in Beijing and North Carolina in the United States, would post a net profit of US$807 million for the financial year, up from US$635 million a year earlier.

Lai estimated revenue would reach a new high of US$38 billion from about US$34 billion in the previous financial year.

Both IDC and Gartner said Lenovo, Hewlett-Packard and Dell achieved year-on-year increases in shipments of personal computers last quarter, while other suppliers struggled.

Sony, once a popular notebook and desktop brand, sold its personal computer business in February to a Japanese investment fund.

From Tuesday, Microsoft ceased providing automatic fixes or online technical assistance for Windows XP. Users no longer receive security updates to protect their personal computers from malicious software.

“The end of XP support by Microsoft on April 8 has played a role in easing the decline of PC shipments,” Gartner analyst Mikako Kitagawa said.

“We expect the impact of XP migration worldwide to continue throughout 2014.”



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