Lenovo profits jumped 29 percent
Lenovo profits jumped 29 percent to $817 million and revenue rose by 14% to $38.7 billion for the year to March 2014. The world’s largest personal computer manufacturer sold 55 million PCs, 50 million smartphones and 9.2 million tablets.
The company’s share of the global PC market expanded from 15.6% to 17.7% – the global market for PC’s declined by 8% during the same period.
Even while the PC market in China slowed down, sales there increased by 1 percentage point. For the first time, Lenovo’s EMEA (Europe, Middle East and Africa) PC sales overtook that of China in the last quarter.
Lenovo PCs overtake Apple in US
In the United States, Lenovo overtook Apple to number three spot in PC shipments in the fourth quarter. For the last twenty quarters, PC sales have outgrown the industry’s global market growth (or contraction).
“The record sales and profits that we delivered last year prove that Lenovo can grow and deliver its commitments, no matter the market conditions. Not only did we strengthen our leading position in PCs, but we gained three points in tablets by quadrupling sales volume and became the fastest growing major smartphone company in the world.”
“This demonstrates our capability to manage both businesses that are already mature, as well as those that are shifting to maturity. Meanwhile, we are building new engines for growth in the enterprise and ecosystem. Through the combination of our existing and new businesses, Lenovo offers tremendous value to shareholders today, and our value will be even greater in the future.”
Lenovo fourth quarter results, year-over-year comparison
- Revenue: $9.4 billion. 19% increase.
- Pre-tax income: $212. 28% increase.
- Gross profit: $1.24 billion. 18% increase.
- Gross margin: 13.3%.
- Operating profit: $231 million. 37% increase.
This is the fourth successive quarter that Lenovo’s tablet and smartphone sales exceeded those of PCs. This is good news for the company, which is trying increase its non-PC sales as the overall global market declines. That is why it bought Motorola Mobility for $2.91 billion from Google earlier this year.
The PC market is gradually dying, analysts say, as consumers opt for tablets and smartphone in growing numbers. Over one billion smartphone were delivered globally in 2013.
In an interview with the BBC, Bryan Ma from IDC Asia Pacific, an IT and telecoms consultuncay, said:
“Like many other vendors in the industry, Lenovo is faced with the challenge of a PC market that is under heavy assault from smartphones and tablets. It’s true that Lenovo may be biting off more than it can chew by acquiring so many companies like Motorola Mobility and IBM’s server business, but I see these as necessary – if long term – steps in the right direction.”
“Motorola also gives Lenovo a much needed go-to-market route for phones into the US and Latin America, all with the protection of Google’s patents.”
Lenovo Group Ltd., headquartered in Beijing , China, and Morrisvile, North Caroline, US, is a Chinese multinational computer technology company. It employs 35,000 workers worldwide.
It designs, develops, makes and sells smartphones, tablet computers, computers, workstations, servers, electronic storage devices, smart TVs, and IT management software.