Lenovo widens lead in PC market as industry gets corporate sales boost

Hong Kong-listed company achieves global market share of more than 19pc as corporate buyers in developed countries bolster sales

PUBLISHED : Friday, 11 July, 2014, 1:31am
UPDATED : Friday, 11 July, 2014, 1:31am

Lenovo, the world's largest supplier of personal computers, has posted its highest-ever quarterly global market share as increased corporate demand bolstered total shipments in the three months to June, according to analysts' preliminary estimates.

"The global PC industry is a more than US$200-billion-a-year business, and the market is getting healthier. I am confident that we will remain on track to achieve our targets and deliver on our commitments for profitable growth," Lenovo chairman and chief executive Yang Yuanqing said in a statement to the South China Morning Post yesterday.

In separate reports, technology research firms IDC and Gartner said worldwide shipments last quarter received a boost from continued desktop computer replacement activity by businesses, after Microsoft ended support for its old Windows XP operating system in April.

IDC estimated that personal computer shipments fell 1.7 per cent to 74.362 million units, which was better than the 7.1 per cent drop it predicted for the quarter. Gartner, however, calculated a flat growth of 0.1 per cent in the same quarter to 75.764 million units.

The United States, Canada and Europe showed the strongest growth among geographic markets, reflecting more stable conditions, according to IDC.

Mikako Kitagawa, a principal analyst at Gartner, said personal computer sales in emerging markets "will take more time to stabilise" because of competition from low-cost media tablets.

In the three months to June, Lenovo remained the industry leader for the sixth consecutive quarter, widening its lead over rivals Hewlett-Packard, Dell, Acer and AsusTek.

The company reached a record global market share of 19.6 per cent with shipments of 14.563 million units per IDC estimates, while Gartner calculated a 19.2 per cent share on shipments of 14.518 million.

That performance could well put Hong Kong-listed Lenovo, which operates in more than 160 countries, in position to set new record earnings in its financial first quarter to June. Personal computer sales make up about 80 per cent of total revenue each quarter for the company, which is also a major player in tablets and smartphones.

In a report, Bernstein Research senior analyst Alberto Moel said: "Lenovo has been using the profitable PC business as the source of investment dollars for its other businesses for a long time now, and we do not expect that to change."

For its last financial year to March, Lenovo's net profit climbed 29 per cent from a year ago to a record US$817 million as revenue jumped to a new high of US$38.7 billion, a 14 per cent gain from the previous year.

The company expects to clear all regulatory hurdles and complete its two biggest acquisitions by the end of this year. Announced in January, these deals are the US$2.91 billion takeover of Google's Motorola Mobility and the US$2.3 billion purchase of IBM's low-end server business.

Lenovo's share priced edged up 0.76 per cent yesterday to close at HK$10.58.